Asked by
Josie beshears
on Oct 14, 2024
Verified
suppose that Grinch and Grubb go into the wine business in a small country where wine is difficult to grow.The demand for wine is given by p $360 .2Q, where p is the price and Q is the total quantity sold.The industry consists of just the two Cournot duopolists, Grinch and Grubb.Imports are prohibited.Grinch has constant marginal costs of $45 and Grubb has marginal costs of $15.How much Grinch's output in equilibrium?
A) 237.50
B) 712.50
C) 950
D) 475
E) 1,425
Marginal Costs
The excess cost involved in producing one more unit of a good or service.
Demand for Wine
The desire or consumers' willingness to purchase wine at a given price level.
Cournot Duopolists
Refers to a market structure where two firms compete with each other by independently choosing production levels to maximize profit, assuming the other's output level as given.
- Identify the equilibrium output for corporations within a Cournot duopoly context.
- Put the Cournot model into practice across different market scenarios and demand dynamics.
- Analyze the consequences of external elements, like import restrictions, on duopoly-dominated markets.
Verified Answer
RS
Learning Objectives
- Identify the equilibrium output for corporations within a Cournot duopoly context.
- Put the Cournot model into practice across different market scenarios and demand dynamics.
- Analyze the consequences of external elements, like import restrictions, on duopoly-dominated markets.
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