Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

تمرين 1

In Figure, how would an increase in B's marginal cost from zero to a positive number shift its best-response function? Would it shift A's? On a graph, indicate where the new Nash equilibrium would be.
2. On a graph, show how the best-response functions would shift and where the new Nash equilibrium would be if both firms marginal costs increased by the same amount. What about a cost decrease? What about an increase in the demand intercept above 120?
Firm A's best-response function shows the profit-maximizing quantity it would choose for any quantity chosen by firm B. Firm B's best-response function shows the profitmaximizing quantity it would choose for any quantity chosen by firm A. Both firms must play best responses in the Nash equilibrium. The only point on both best-response functions is the point of intersection (qA ¼ 40, qB ¼ 40).