Tutorium/Case studies

Question 1

Calculate Monopoly

Answer 1

1. Profit function
2. Derive by q for optimal quantity
3. put q* into profit function
4. calculate optimal price

Question 2

Calculate Cournot

Answer 2

1. calculate inverse demand function
2. set up profit function
3. derive profit function by q, set = 0, umstellen nach q1, q2
4. calculate Best Response
5. insert q2 in q1, calculate q1, q2
6. insert q’s in p for p*
7. insert p* and q*s into profit function

Question 3

Calculate Bertrand

Answer 3

1. determine p*
2. calculate choke price via inverse demand function p(q) with p(0)
3. determine q*s for each case
4. determine profit* for each case