A tutor question from my school...still thinking of what should i do with the question 1
GC and BQ are big company on the cereal market,Both sell bran and demand for bran is given by P=11-Q1-Q2, where Q1 is the amount produced by GC Corp, and Q2 is the amount produced by Big Q. The marginal cost of production are constant and the same for both companies: MC=1.
Question1) Derive the best response curve for GC Corp by setting up a table giving the best response of GC Corp if BIG Q produces, 1,3,5 or 8 units of bran. Set up the same table for BIG Q. Draw a diagram with Q1 on the x-axis (the horizontal axis) and Q2 on the y-axis (the vertical axis). Draw both best respons curves using the tables you set up. Hint: Remember, both tables provide you with combinations of Q1 and Q2.
i've got the table for GC, why i need to set up the same table for BQ? does't it the same??? and for the diagram, should i show the equilibrium??..
and the Hint said that the both tables provid me with combination of Q1 and Q2, when i finished the table for GC, i already get the combination of Q1 and Q2, is it necessary for me to do the BQ one??? help><!
GC and BQ are big company on the cereal market,Both sell bran and demand for bran is given by P=11-Q1-Q2, where Q1 is the amount produced by GC Corp, and Q2 is the amount produced by Big Q. The marginal cost of production are constant and the same for both companies: MC=1.
Question1) Derive the best response curve for GC Corp by setting up a table giving the best response of GC Corp if BIG Q produces, 1,3,5 or 8 units of bran. Set up the same table for BIG Q. Draw a diagram with Q1 on the x-axis (the horizontal axis) and Q2 on the y-axis (the vertical axis). Draw both best respons curves using the tables you set up. Hint: Remember, both tables provide you with combinations of Q1 and Q2.
i've got the table for GC, why i need to set up the same table for BQ? does't it the same??? and for the diagram, should i show the equilibrium??..
and the Hint said that the both tables provid me with combination of Q1 and Q2, when i finished the table for GC, i already get the combination of Q1 and Q2, is it necessary for me to do the BQ one??? help><!
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