Scribd
Upload
3 views1 page

Cournot Duopoly and Cement Market Analysis

The document outlines an individual assignment that covers topics such as pricing of factors of production and income distribution, as well as Cournot duopoly analysis involving two firms with specific cost functions. It includes tasks to derive reaction functions, profit-maximizing outputs, market price, and profits for the firms. Additionally, it discusses the market dynamics of a dominant cement factory in Ethiopia and requires calculations related to demand functions, market price, and outputs of both the dominant and smaller cement factories.

Uploaded by

akrabizewge25
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
3 views1 page

Cournot Duopoly and Cement Market Analysis

The document outlines an individual assignment that covers topics such as pricing of factors of production and income distribution, as well as Cournot duopoly analysis involving two firms with specific cost functions. It includes tasks to derive reaction functions, profit-maximizing outputs, market price, and profits for the firms. Additionally, it discusses the market dynamics of a dominant cement factory in Ethiopia and requires calculations related to demand functions, market price, and outputs of both the dominant and smaller cement factories.

Uploaded by

akrabizewge25
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Individual Assignment

1. Discuss briefly about pricing of factors of production and income distribution


(Chapter five )
2. The market demand facing the Cournot duopolist is given by Q=200−2 P and the
total cost functions of the two firms are:
C 1=5 Q1
2
C 2=0.5 Q2
Where Q=Q 1+Q2
(a). Find the reaction function of the two firms
(b). Find the profit maximizing levels of output (Q1∧Q2 ) for each firm
(c). Find the value of P that maximizes profit
(d). Find the profit of each firm
3. A critical viewer can observe the existence of one large dominant cement factory in
Ethiopia, Derban cement factory, which supplies a large proportion of the total market, and
some smaller cement factories (Muger, National, Mesebo and Koka cement factories), each
of them having a small market share. If the dominant cement factory (Derban) increases or
decreases the price of cement the other cement factories will follow it. The supply of smaller
cement factories are given by S=0.2 P and the market demand is D=50−0.3 P. The total cost
of the leader (Derban cement factory) is TC=4 Q.
(a). Determine the demand function of the Derban cement factory
(b). Find the market price of cement
(c). Find the output of Derban cement factory
(d). Determine the total market demand for cement
(e). Find the output of smaller cement factories

You might also like