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Home / Questions / Suppose demand is given by P=56-2Q . There are two firms with identical costs given by C(q...

Suppose demand is given by P=56-2Q . There are two firms with identical costs given by C(qi)=20qi+F. Find the Subgame Perfect Nash equilibrium for the game with the following timing: in the first

Suppose demand is given by P=56-2Q . There are two firms with identical costs given by C(qi)=20qi+F.

Find the Subgame Perfect Nash equilibrium for the game with the following timing: in the first stage Firm 1 can commit to its output; in the second stage Firm 2 can enter and can choose its output. Do this for fixed costs equal to 50,18, and 2.

The answers are:

3. F = 50: q) = 9,92 = 0, = 112. Firm 1 deters entry by producing the monopoly F = 18:9; = 12, 92 = 0, R = 126. Firm 1 deters

Jun 09 2021 View more View Less

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