The market for aircraft features only two firms: Boeing (firm 1) and Airbus(firm 2). The inverse demand in the market is given byP = 18 − Q,where Q is the aggregate quantity. Both firms have a total cost function given by C(qi) =3qi, i ∈ {1, 2}.(a) Find the Nash equilibrium (q∗1 , q∗2 ) when firms do not collude, and compute theprice and profits of each firm in this equilibrium.(b) Suppose that Boeing and Airbus collude to act as a monopolist and split profitsevenly. Compute the new equilibrium quantity, price and profits.(c) Now, suppose the total cost functions are C(q1) = 3q1 and C(q2) = 6q2. Find thenew Nash equilibrium and compute the price and profits of each firm in this newequilibrium.1

Three firms produce identical products and compete in a market where the inverse demand function is P(q1, q2, q3) = 62 − q1− q2− q3. Each has a per-unit cost of 10 and zero fixed cost. They simultaneously choose quantities. In scenario (a), find the Nash equilibrium of this game and let A = firm 2's profit in the Nash equilibrium.In scenario (b), assume that the firms form a cartel, i.e., they act as a monopoly and split the profit evenly. If the total quantity produced by the cartel is Q, then the inverse demand is P(Q) = 62 - Q. Let B = firm 2's profit in the cartel. Calculate the value of A - B and enter your answer in the box below. Please round your answer to 3 decimal places (e.g., write 4/3 as 1.333).

Two firms (Firm 1 and Firm 2) compete in selling identical products. They choose their outputlevels simultaneously and face the inverse market demand curve given by P = 100 – Q, whereQ = Q1 + Q2 . Q is the total market quantity produced, while Q1 and Q2 represent the outputsproduced by the two firms, respectively. The total cost functions for firm 1 and firm 2 are givenby TC(Q1 ) = 40Q1 and TC(Q2 ) = 40Q2 , respectively.2.1 Determine the Cournot-Nash equilibrium in this market. [9]2.2 Calculate the profit (loss) for each firm.

Consider a Cournot duopoly model we discussed in the lecture where the inverse demand function is P(Q)=5 - Q and the marginal cost for each firm is 8. Which of the following is the Nash equilibrium of this game? A. q1 = q2 = (1,1) B. q1 = q2 = (3,3) C. q1 = q2 = (0,0)

a monopolist can produce at a average cost of AC rs 5 . it faces market demand curve given by Q=52-P supose second firm enter the market let q1=output market of first firm and q2=output of seond firm , let q=q1+q2 . assume that the second firm has the identical cost as the first firm . calculate equilibrium output of both the form enter the market . what is the resulting market price and profit for each firm ?

Question 1 Suppose there are two firms in the market of good X. The cost functionof firm 1 is C1(q) = q2, whereas the cost function of firm 2 is C2(q) = 3q2. Suppose thefirms operate in a perfectly competitive market and face a perfectly elastic demand atP = 30. Find the equilibrium quantity produced in this market. (Hint: Obtain eachfirm’s inverse supply curve and then add them horizontally.)