Econ ON OLIGOPOLY & SOME GAME THEORY IDEAS WITH OLIGOPOLY Assignment

Econ ON OLIGOPOLY & SOME GAME speculation IDEAS WITH OLIGOPOLY - Assignment ExampleIn the contestable market the evaluation of dealings among current souseds and prospective entrants is investigated to a greater extent critically. The market incumbents maintain an oligopoly with the determination of price levels in the market in their favor. Again the oligopoly is well-kept by the government favor and creates a barrier for other firms from venturing in the market.2) Suppose there ar two firms operating in an oligopoly (termed a duopoly), where the firm 1 cost function is given by C1 = 18Q1, for C1 = impart cost, and Q1 = firm 1 output. The cost function for firm 2 is given by C2 = 21Q2, and C2 = total cost of firm 2, and Q2 = output of firm 2. The inverse demand for the product, Q, being sold by the oligopolist firms is given by P = 127 3Q, where Q = Q1+ Q2, and Q1 and Q2 are the same product (vats of toxic solution for breaking down chemical substance components to be used in downstream plastic manufacture).Taking into the consideration the Cournot model in deference to the duopoly that is two firms where both firms concurrently decide a amount of money to produce. Designating the quantity q1 as the amount produced by firm 1 and q2 as the corresponding amount produced by firm 2. Therefore the total quantityThe firm achievement choices are strategic substitutes. That is, an increase in the amount produced by firm1 (holding fixed the underlie amount produced by the corresponding firm 2) will considerably lower the market price and thus resulting in lesser profits for firm 2. Thus, every firm ought to take into consideration the prevailing the production decisions of the other supplementary firm in the process of undertaking its individual production decision regular 1 possess a marginal cost of production equivalent to c1 accompanied by firm 2 which possess a marginal cost of production equivalent to c2. The corresponding Nash equilibrium is computed through the employment tow