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Consider a market in which two firms produce homogeneous goods. Market demand is given by Q = 300 − 2p. Firm 1 has capacity K1 = 130 while firm 2 has capacity K2 = 70. The marginal cost of product ion is the same for the two firms and is c1 = c2 = 30. STATEMENT TO DISCUSS: The pair of prices (p1 = 50; p2 = 50) is a Nash equilibrium of the game in which firms choose prices simultaneously. Statement 2 In country X pharma companies sell vaccines to the National Health System. The Health Ministry ...

ECON 30524 - Bocconi University. Strategic Decision Making and Markets BESS - 30458. GENERAL EXAM: Second Part. Q&A Exercise 1 Consider a market populated by 100 consumers. Each of them is willing to buy one unit of product X if the price does not exceed 50. There exist 2 firms in the market, producing a perfectly homogeneous good and facing no capacity constraint. Firm H has a constant marginal cost cH = 10 and firm L has a constant marginal cost cL = 0. The two firms set prices simultaneously ...