Based on the following information: A and B. Their cost functions are defined below, respectively: CA = 10000 + 10QA + 0.5QA2 and CB = 12000 + 10QB + 0.5QB2. The firms face the following market demand curve: P = 610 – Q, (where Q = QA + QB).
If the firms compete with price (Bertrand model), they can earn profits (πA, πB), allowing rounding errors:
a. (12500, 10500).
b. (15250, 13250).
c. (8000, 6000).
d. (10000, 8000).
If the firms compete with the Cournot model, they can earn profits (πA, πB), allowing rounding errors:
a. (23750, 21750).
b. (22734.375, 20734.375).
c. (33571, 31571).
d. (26250, 24250).
Firm A is the first mover. If firms compete with the Stackelburg model, they can earn profits (πA, πB), allowing rounding errors:
a. (23250.25, 18250.25).
b. (24285.12, 18612.04).
c. (26250, 24250).
d. (23571.5, 21831.6).
If the firms operate as a centralized cartel, they can earn profits (πA, πB), allowing rounding errors:
a. (28000, 26000).
b. (27000, 25000).
c. (26000, 24000).
d. (25000, 23000).