Can someone please help me solve both problems step by step? Pag Question 6 O ou
ID: 1157153 • Letter: C
Question
Can someone please help me solve both problems step by step?Pag Question 6 O out of 1.7 point Demand in a market dominated by two firms (a duopoloy) is determined according to: P 58-0.4Q The two firms have identical marginal cost of MC-12+1.3Q Find the market price that exists when the two firms compete. Selected Answer: Correct Answer: Response 40.48 43.3 5% This problem is similar to problem 2 in the Practice Problems and the second problem in the Instructional Video. Here. MC is given to you. Feedback: Question7 Oout of 1.7 po A market is served by a dominant firm and many smaller firms. These smaller firms act as price takers. Market demand is given by: Q-1,287-14P The combined supply of the smaller firms is Q 31+30P The dominant firm's maringal cost is MC- 2+0.020 Find the total quantity produced by the smaller firms. Selected Answer: 555.06 Correct Answer: 0610.8 5% Response This problem is similar to problem 1 in the Practice Problems and the fi problem in the Instructional Video. Feedback stion 8 1.7 out of
Explanation / Answer
Ans 6)
Profit for Firm 1= Pq1-MC*q1=(P-MC)*q1=(58-0.4q1-0.4q2-12-1.3q1)q1=(46-1.7q1-0.4q2)q1
Profit for Firm 1=46q1-1.7q1^2-04q1q2
d(Profit)/dq1=46-3.4q1-0.4q2=0
d(Profit)/dq2=46-3.4q2-0.4q1=0
46-3.4q1=0.4q2
46-3.4q2=0.4q1
46-3.4((46-3.4q1)/0.4)=0.4q1
46-8.5(46-3.4q1)=0.4q1
-46+6.8q1=0.4q1
P=58-0.4(18.2)=
-345+28.9q1=0.4q1
28.5q1=345
57q1=690
q1=12.10
q2=12.10
P=58-0.4(12.1+12.1)=48.32