Solve for the Bertrand equilibrium for the firms described below if Firm 1's marginal cost is $15 per unit and Firm 2's marginal cost is $25 per unit. Firm 1 faces a demand function of 9₁ = 50-2p₁

Answers

Answer 1

The Bertrand equilibrium price is $65.

Given: Marginal cost of Firm 1 = $15

Marginal cost of Firm 2 = $25

Demand function of Firm 1 = 9₁ = 50-2p₁

To find: Bertrand equilibrium for the given firms

Bertrand Model

The Bertrand Model is a game theory model that describes how firms compete on prices and how prices adjust in equilibrium. It is named after Joseph Bertrand, a French mathematician who proposed it. According to Bertrand's model, firms offer the lowest possible price and they can sell all the units they produce. If two or more firms produce the same product, they will compete on price until the price is equal to their marginal cost. The Bertrand equilibrium price is the same as the marginal cost.

Bertrand Equilibrium

In Bertrand equilibrium, both firms will charge a price equal to their marginal cost. This means that the market price will be equal to the marginal cost of both firms. Since both firms have different marginal costs, they will have different prices.

To find the Bertrand equilibrium price, we need to solve the following equations:

P1 = c1P2 = c2

Where,

P1 = Price charged by Firm 1

c1 = Marginal cost of Firm 1

P2 = Price charged by Firm 2

c2 = Marginal cost of Firm 2

Solving for the Bertrand equilibrium for the given firms

Firm 1's demand function: 9₁ = 50-2p₁⇒ p₁ = (50-9₁)/2⇒ p₁ = 25 - (9₁/2)

Firm 1's Marginal revenue (MR₁) = 9₁

Firm 2's marginal revenue (MR₂) = 9₂P1 = c1 + MR1P2 = c2 + MR2P1 = 15 + 9₁P2 = 25 + 9₂

Equating P1 and P2,

15 + 9₁ = 25 + 9₂⇒ 9₁ - 9₂ = 10⇒ 9₂ - 9₁ = -10

Therefore, the Bertrand equilibrium price is calculated by using the following formula:

P = c + [(MR1 + MR2) / 2]

P1 = c1 + MR1 = 15 + 9₁

P2 = c2 + MR2 = 25 + 9₂P = 20 + [(9₁ + 9₂) / 2]

Since 9₁ = 50-2p₁,⇒ 9₁ = 50 - 2(25 - 9₁/2)⇒ 9₁ = 25 + (9₁/2)⇒ 9₁/2 = 25⇒ 9₁ = 50

Using this value in the above equation, we get:

P = 20 + [(9₁ + 9₂) / 2]

⇒ P = 20 + [(50 + 9₂) / 2]

⇒ P = 45 + (9₂/2)

Now, to get the value of 9₂, substitute P₂ = c₂ + MR₂,

⇒ P₂ = 25 + 9₂

⇒ 45 + (9₂/2) = 25 + 9₂

⇒ 9₂/2 = 20

⇒ 9₂ = 40

Therefore, the Bertrand equilibrium price is:

P = 45 + (9₂/2)⇒ P = 45 + (40/2)⇒ P = 65

Therefore, the Bertrand equilibrium price is $65.

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Related Questions

What is the economic importance of fish farming in Nepal?​

Answers

At least fisheries contribute 1.13% to Gross Domestic Product and 4.18% to Agricultural Gross Domestic Product in Nepal

Select three things are included in a product requirements document.(more than one answer)

[ ]customer stories
[ ]request for proposal
[ ]service providers
[ ]business plan
[ ]market data

Answers

Answer:

b d e

If i am wrong i am sorry

The correct answers are B,D, and E.

B. request for proposal

D. business plan

E. market data

Which steps are parts of doing a cost benefit analysis check all that apply: predicting costs, identifying outcomes, comparing costs, calculating cost, or delaying decisions

Answers

Answer:

Identifying Outcomes

Comparing Costs

Calculating Costs

Explanation:

Cost benefit analysis is a method which is used in decision making process to identify the best option available in financial terms. It helps in finacial value of any decision by considering its posssible expenses and advantages. The first step involved is to identify the outcome in financial value which is the consideration of cash outflow and inflow. The second step is to calculating the cost of options available. Now the third and last step is to comparing the results and opting the option with most benefits.

Answer:

Identifying Outcomes

Comparing Costs

Calculating Costs

Explanation:

Just the test

LCD Industries purchased a supply of electronic components from Entel Corporation on November 1,2021, In payment for the $25.4 million purchase, LCD issued a 1-year installment note to be paid in equal monthly payments at the end of eoch month. The payments include interest at the rate of 12\%(EV of \$1, PV of \$1. EVA of \$1. PVA of \$1, EVAD of \$1 and PVAD of \$1) (Use appropriate factor(S) from the tables provided.) Required: 1. \& 2. Prepare the journal entries for LCD's purchase of the components on November 1, 2021 and the first installment payment on November 30,2021 . 3. What is the amount of interest expense that LCD will report in its income statement for the year ended December 31,2021 ? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Prepare the fournal entries for LCDs purchase of the components on November 1, 2021 and the first instaliment payenent on November-30, 2021. (Enter your answers in whole dollars. If. no entry is required for a transoctionevent, select "No joumal entry required in in the fitst account fleld.)

Answers

LCD Industries purchased a supply of electronic components from Entel Corporation. In payment for the $25.4 million purchase, LCD issued a 1-year installment note.

Journal entry for LCD's purchase of the components on November 1, 2021: In this transaction, LCD Industries is buying a supply of electronic components from Entel Corporation for $25.4 million.

Here, LCD is the buyer, so the account to be debited is Purchases or Inventory, and the account to be credited is Notes Payable for $25.4 million.

The journal entry will be as follows: Account Title Debit Credit Purchases or

Inventory $25,400,000

Notes Payable $25,400,000

Journal entry for the first installment payment on November 30, 2021:

LCD has to pay the installment on the loan that they issued on November 1, 2021, with the amount of $25.4 million. The payment includes interest at the rate of 12% annually, payable monthly.

Here, LCD is the debtor, so the account to be debited is Notes Payable, and the accounts to be credited are Interest Expense and Cash.

The journal entry will be as follows: Account Title Debit Credit

Interest Expense $254,000

Notes Payable $2,070,826

Cash $2,324,826

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I suggest adding a report button on the profile page, this way you can report the person instead of a single post, yes, specifically on the bots

Answers

Answer:

I agree

Explanation:

Need help ASAP please answer this

Need help ASAP please answer this

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The sum of the bank's total amount of liabilities and net worth is $5002 million.

How to calculate the values?

The sum of the bank's total amount of liabilities and net worth will be:

= Total reserves + Loans + Securities + Other assets.

= 268 + 3653 + 949 + 132

= $5002 million

The additional amount of loans that the bank can make to household and firm is $8 million. This is simply the value of the excess reserve.

The current quantity of transaction deposits at the bank will be:

(Total reserve - Excess reserve) = Transactions deposit × Reserved ratio

(268 - 8) = Transaction deposit × 10%

260 = Transaction deposit × 10%

Transactions deposit = 260/10%

Transaction deposit = $2600 million = $2.6 billion

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Show the full pic plz

Which resource can you use to view business or suppliers divided into different categories?

You may use online or offline (blank) to view businesses or suppliers classified into different categories.

Answers

Answer:

yellow pages

Explanation:

Answer:

It's "Yellow Pages"

Explanation:

I got it right!!

What can a boosted post help an advertiser achieve?

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A boosted post helps an adviser to connect with the audience and gain trust.

Boosted post is a kind of post that is used on social media platforms in order to enhance the page of the platform and to attract audience to the page. Boosted post can help better communication with the audience along with the increase in a greater number of messages, calls and texts. Boosted posts help for better advertisements of the product. For example, A Chocolate brand may use Boosted posts to gain audience as well as consumers. Boosted posts helps an adviser to be discovered among people, to establish a benchmark in the market and to gain more and more customers. It's a kind of marketing strategy used for publicity purpose.

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Should the United States increase their top tax rate by taxing individuals 90% on all income they earn ABOVE $500,000

Answers

Answer:

Individuals who earn ~$500,000 and above 40% of all income taxes, and pay 59.1% of all taxes shared. In a common sense, the amount paid should be proportional to not only the amount they earn, but also the amount of people within that tax bracket. In essence, the United States should not increase the top tax rate to 90%, as it is an extremely unfair tax to individuals, just because they are "richer". Also, a hike in taxes to the rich would negatively affect everybody else as well. Many rich people own successful businesses that employ hundreds, if not thousands of middle class and lower class workers. An increase in taxes can lead to lower pays, stagnant job growth or even shrinking, as well as higher costs of products and services to help make up for the amount loss to taxes. The United States government do not need the extra funds if they themselves push for agendas that are not beneficial to the ordinary American, and therefore, they do not have the justification to raise the tax rate.

~

When the stock market as a whole is rising in value then it is referred to as a bear market. True or false?

Answers

Answer: False

Explanation: A bear market is when a market experiences prolonged price declines. It typically describes a condition in which securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment.

What does indigenous technology mean?​

Answers

Answer: I hope this is helpful mark brainlist if right then no if wrong

Explanation:

Indigenous technology is used by the native inhabitants of a country or region and it constitutes an important part of its cultural heritage. Characteristically, indigenous technologies: Are recognized as animate, imbued with the breath of life and they live in form and function.Technologies employed by the native inhabitants of a country and which constitute an important part of its cultural heritage and should therefore be protected against exploitation by industrialized countries; the problem of indigenous knowledge has been discussed during the Rio Conference but it does not receive much ...Types of indigenous technology in India are; (i) Generic Drugs. (ii) Thorium based Nuclear Reactors. (iii) Plastic RoadsIndigenous Technology is created within a sensory environment that builds on our sense of relationship, meaning, balance, feeling, memory and place as well as sight, sound, smell, taste and touchIndigenization is the process by which Indigenous ways of knowing, being, doing and relating are incorporated into educational, organizational, cultural and social structures of the institution.One example of Indigenous Technologies in action today can be witnessed in differential approaches to medicine. Medical technologies in the Western Scientific sense of the term might conjure images of biomedical research labs, electromagnetic monitors or imaging systems such as CT or MRI scans.Indigenous technology is used by the native inhabitants of a country or region and it constitutes an important part of its cultural heritage. Characteristically, indigenous technologies: Are recognized as animate, imbued with the breath of life and they live in form and function.

john a supervisor at the local factory revicea freuesnt requests from workers on how to fix the machine they use what shoud, john do

Answers

The answer is John should continue to fix the machine himself.

Critical reading is a
a Theory
b. Process
C. Summarization strategy
d. None of these
Please select the best answer from the choices provided
A
В
C
D

Answers

Answer:C

Explanation:

Answer:

The correct answer for this question is B

For February, sales revenue is $900,000, sales commissions are 5% of sales, the sales manager's salary is $96,000, advertising expenses are $80,000, shipping expenses total 2% of sales, and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of February are

Answers

Answer:

$245,600

Explanation:

The computation of Total selling expenses is shown below:-

Particulars                         Calculation                 Amount

Sales Commissions   ($900,000 × 5%)              $45,000

Salary expenses                                                   $96,000

Advertising expenses                                          $80,000

Shipping expenses     ($900,000 × 2%)             $18,000

Miscellaneous selling  

expenses                     ($2,100 + 1 ÷ 2 ×               $6,600

                                      ($900,000 × 1%)

Total Sales expenses                                             $245,600

We simply added all the items

How can Jordan apply price policy?

Answers

Jordan's Underprices

If you find a lower advertised price on identical merchandise under the same terms and conditions from another store-based retailer within the local Retail Trade Area, within 30 days of purchase, Jordan's Furniture will refund the difference.

Industry: Retail; Furniture

Which of the following is a country which operates under a traditional economy?
O North Korea
O Cuba
O Ecuador
O Sweden

Answers

Answer:

Dont worry about me, I just added this answer so the other person can get their brainliest  because they definetly deserve it

Answer:

The answer is Ecuador :)

When an employee restates a supervisor's comment, using the employee's own words, what is the employee doing?
conciseness
paraphrasing
inappropriate slang
focused attention?

Answers

Answer:

b

Explanation:

When an employee restates a supervisor's comment, using the employee's own words, the employee is paraphrasing. Thus, option 'B' is the correct option.

What is paraphrasing?

A paraphrase is a restatement of a text or passage's meaning using other terms. The word itself is taken from the Ancient Greek phrase "additional style of expressing" via Latin paraphrasis. Paraphrasis is another name for the process of paraphrasing. Paraphrasing as a specialized educational activity dates back to at least Roman times, when the author Quintilian suggested it for pupils to enhance language agility, despite the fact that paraphrases were probably common in oral traditions.

This tradition persisted in the Middle Ages when writers like Geoffrey of Vinsauf created classroom exercises that involved using rhetorical devices and paraphrasing to create poems and speeches. It appears that students are no longer required to practice paraphrasing as a separate skill.

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does 1 plus 1 = 65 yes or no

Answers

Answer:

No 1 + 1 = 2

Explanation:

Lol

T_
------ Y
Robotics and automation are increasingly used in
the travel and tourism industry to handle labour
intensive and mundane tasks.

T_------ YRobotics and automation are increasingly used inthe travel and tourism industry to handle labourintensive

Answers

Answer:

Yes.robotics and automation are increasingly used in the travel and tourism industry of handle labour intensive and mundane tasks

A marketing plan documents how to focus marketing efforts. In good marketing strategy, what's at the center of all the efforts?

Answers

Answer:

★ The answer is CUSTOMER

Explanation:

Hope you have a great day :)

why or why not hats and hoods should be allowed in school
( its detrimental this relays on the new school board meeting with student class rep)

Answers

Well here’s why it shouldn’t be allowed, it could cause distractions to other people around you or to yourself or people could hide stuff inside of them food etc.

Here’s why it should be allowed. some people feel more comfortable wearing one and I feel like that’s really the only reasonable reason for someone to wear one.

in recent years, the mortgage banking industry has experienced

Answers

In recent years, the mortgage banking industry has experienced various trends and developments. These include changes in interest rates, regulatory reforms, shifts in housing market conditions, and advancements in technology that have influenced the industry's dynamics.

The mortgage banking industry has been impacted by fluctuations in interest rates, which can affect borrowing costs and mortgage demand. Changes in interest rates can lead to refinancing waves, where homeowners seek to take advantage of lower rates to reduce their mortgage payments. Regulatory reforms have also played a significant role in shaping the industry. Following the global financial crisis, stricter regulations have been implemented to enhance consumer protection and ensure the stability of the housing market.

Furthermore, the industry has witnessed shifts in housing market conditions. This includes changes in home prices, housing supply and demand, and mortgage delinquency rates. Economic factors such as employment levels and income growth also influence the demand for mortgages.

Lastly, advancements in technology have impacted the mortgage banking industry. Online mortgage platforms and digital processes have streamlined the application and approval process, improving efficiency and accessibility for borrowers. Additionally, the rise of fintech companies has brought new players into the market, offering alternative lending options and innovative mortgage products.

Overall, the mortgage banking industry has been shaped by a combination of interest rate fluctuations, regulatory changes, housing market conditions, and technological advancements, all of which have influenced the industry's performance and competitive landscape in recent years.

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Alltech Company maintains a separate accounts receivable account for each customer. On June​ 18, Alltech provides​ $6,300 of services on account to customer Anthony and​ $1,200 of services on account to customer Walker. How will these two transactions affect the control and subsidiary​ accounts?

Answers

Answer:

B. The control account, Accounts Receivable, will be increased with a debit of $8 300

Explanation:

According to the given situation, in total, the Alltech company makes sales of 2, one for $6,300, and the other for $2,000. The total of sales will be computed by adding both sales that are $6,300 + $2,000 = $8300 will therefore be booked and control and receivables will be boosted with a debit of $8,300.

Therefore, the correct answer is B.

The Law of Demand states that as...
A. As prices increases Quantity demand increases
B.As price increases quantity demand decreases
C.Price changes have no effect on quantity
D.Price changes shift the demand left or right

Answers

Answer:

b is ur answer

Explanation:

Answer:

A

Explanation:

The more people want something the more valuable it is. Like when new shoes or the new PS or Xbox are released are cases of Law of Demand

In July 2008, Dow offered $78 in cash for each share of ROH. Using your estimates of standalone share price of ROH and the value of cost synergies from the merger, along with the growth synergies mentioned in the case, compute the net gains to Dow shareholders and ROH shareholders, respectively, under this deal. How sensitive are these estimates to the growth synergies being predicted by Dow

Answers

That’s an easy one the answer is that you have to find peace in who you are

audit documentation that shows the detailed evidence and procedures regarding the balance in the accumulated depreciation account for the year under audit will be found in the:

Answers

The Standard file audit documentation contains the audit evidence and procedures that are specific to the balance in the cumulative depreciation account for such audited year.

What is contained in audit documentation?

Audit documentation involves records of the preparation and execution of the job, the methods carried out, the evidence gathered, and the findings drawn by the auditor, among other things. The term "audit documentation" can also apply to work papers as working documents.

What does audit documentation serve as?

aiding the audit's planning and execution by the engagement team. allowing the engagement group to assume responsibility for their efforts. keeping a record of issues that will continue to be important for future audits. legal, regulatory, or other obligations that may be present.

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Fill in the blank. it would be possible to determine the ppp exchange rate that would exist if markets were efficient by comparing ___. multiple choice question.

Answers

The correct answer is option B) To determine the PPP exchange rate that would exist if markets were efficient in comparing the prices of traded goods and services.

The exchange rate between two currencies that offers each one the same purchasing power in various nations is known as the Purchasing Power Parity (PPP) exchange rate.

A unit of one currency should be able to purchase the same quantity of products and services in many nations in an efficient market, according to this theory.

This implies that the ratio of the prices of a basket of goods and services in each country should be the same as the exchange rate between two currencies.

We can determine the PPP exchange rate that should exist if markets are efficient by comparing the costs of similar goods and services in two different countries.

Complete Question:

Which of the following would be possible to determine the PPP exchange rate that would exist if markets were efficient?

A) Comparing the current exchange rate

B) Comparing the prices of traded goods and services

C) Comparing the inflation rates of two countries

D) Comparing the economic growth rates of two countries

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Supper Company Ltd., reported the following stockholders’ equity on its balance sheet at June 30,

2012:

Supper Company Ltd.

Stockholders’ Equity

June 30,2012

Paid-in Capital

Preferred stock, 10%,? par, 650,000 shares authorized, 280,000 shares issued $ 1,400,000

Common stock, par value $? per share, 5,000,000 shares authorized,

1,000,000 shares issued and outstanding

2,000,000

Paid-in capital in excess of par—common 6,000,000

Total paid-in capital 9,400,000

Retained earnings 12,300,000

Total Stockholders’ equity $21,700,000

Requirements:

1. What is the par value per share of Supper’s preferred stock? (Show Workings)

2. What is the par value per share of Supper’s common stock? (Show Workings)

3. What is the selling per share for the $6,000,000 reported as paid-in capital in excess of par –

common? (Show Workings)

4. Prepare two (2) summary journal entries to record issuance of all the Supper Company Ltd stock for

cash. Explanations are not required.

Answers

Answer:

1. Par Value of Preferred stock;

= Preferred stock value / Shares issued

= 1,400,000/280,000

= $5

2. Par Value of Common Stock

= Common stock value / Shares issued

= 2,000,002/1,000,000

= $2

3. Selling price per share including Paid-In Cap

Paid-in cap is the price of a share that exceeds its par value. Selling price therefore is;

= (Par Value + Paid In cap)/ Number of shares

= (2,000,000 + 6,000,000) / 1,000,000

= $8 per share

4.

DR Cash                                                         $1,400,000

     CR Preferred Stock                                                            $1,400,000

DR Cash                                                                $8,000,000

      CR Common Stock                                                                $2,000,000    

            Paid-In Capital in excess of par - Common Stock       $6,000,000

The premature death of an individual is an example of a ___a. nondiversifiable risk. b. pure risk c. speculative risk. d. physical hazard

Answers

The premature death of an individual is an example of a pure risk.

What is a pure risk?A pure risk is a type of risk that has only two possible outcomes: loss or no loss. There is no opportunity for a gain or profit in this type of risk. It is beyond the control of the insured, who has no influence over the occurrence of the event, as well as the outcome of the event. It is an example of a risk that is insurable.There are two kinds of risks: speculative risk and pure risk.

A pure risk is one in which there is only a chance of loss or no loss. In general, pure risks are insurable, whereas speculative risks are not. An example of a pure risk is the possibility of your house being destroyed by fire.What are the main features of pure risks?Pure risks are insurable risks that fall under the umbrella of insurance. It's crucial to understand the essential features of pure risks before delving into their different types. The following are the characteristics of pure risks:The risk of loss is real.

The insured has no influence over the occurrence of the event.Pure risks have only two potential outcomes, loss or no loss.Pure risks are insurable.

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