TUGAS EKONOMI MANAJERIAL

Nama : Stevia Carla Sucipto

NIM : 115220068
Kelas : CX

(Soal 4)
1. The inverse demand for a homogeneous-product Stackelberg duopoly is P = 16,000 − 4Q.
The cost structures for the leader and the follower, respectively, are CL(QL) = 4,000QL
and CF(QF) = 6,000QF. (LO2, LO3)
a. What is the follower’s reaction function?
b. Determine the equilibrium output level for both the leader and the follower.
c. Determine the equilibrium market price.
d. Determine the profits of the leader and the follower.
Answer :
Given : P = 16.000 - 4Q
CL(QL) = 4.000QL
CF(QF) = 6.000QF
a. P = 16.000 - 4Q
(Q = q1 + q2)
P = 16.000 - 4q1 – 4q2
TR2 = P(q2)
= (16.000 - 4q1 – 4q2) q2
𝜋𝑟 2 = 𝑇𝑅2 − 𝑇𝐶2
= (16.000 – 4q1 – 4q2) q2 – 6.000Q2

ⅆ𝜋2
= 16.000 – 4q1 – 8q2 – 6.000
ⅆ𝑞2

0 = 10.000 − 4𝑞1 − 8𝑞2

10.000 = 4q1 + 8q2
10.000−4𝑞1
The reaction function of follower is : = 𝑞2
8
b. 𝜋1 = 𝑇𝑅1 − 𝑇𝐶1
10.000−4𝑞1
= (16.000 − 4𝑞1 − 4 ( )) 𝑞1 − 4.000𝑞1
8

= (16.000 − 4𝑞1 − 5.000 + 2𝑞1)𝑞1 − 4.000𝑞1

= (11.000 − 2𝑞1)𝑞1 − 4.000𝑞1
ⅆ𝜋1
= 11.000 – 4q1 – 4.000
ⅆ𝑞1

0 = 7000 − 4𝑞1
7000 = 4q1
q1 = 1.750 units (leader)

10.000−4𝑞1
Substitute this into reaction of follower :
8
10.000−4𝑞1
= q2
8

10.000 − 4(1.750)
= 𝑞2
8
10.000 − 7.000
= 𝑞2
8
375 = q2
The output produced by follower is 375 units

c. Substitute these (P =16.000 -4Q ; where Q = q1 + q2)

= 16.000 – 4(1.750 + 375)
= 16.000 – 8.500
= $7.500
the equilibrium Stackelberg market price is $7.500

d. Substitute these 𝜋1 = 𝑇𝑅1 − 𝑇𝐶1

= Pq1 – 4.000q1
= (P – 4.000) q1
= (7.500 – 4.000) (1.750)
= $6.125.000 the profit from leader
 𝜋2 = 𝑇𝑅2 − 𝑇𝐶2
= 𝑃𝑞2 − 6.000𝑞2
= (𝑃 − 6.000)𝑞2
= (7.500 − 6.000)375
= $562.500 the profit from follower

(Soal 5)
2. Consider a Bertrand oligopoly consisting of four firms that produce an identical product
at a marginal cost of $140. Analysts estimate that the inverse market demand for this
product is P = 400 − 5Q. (LO2)
a. Determine the equilibrium level of output in the market.
b. Determine the equilibrium market price.
c. Determine the profits of each firm.
Answer :
Given : MC = $140
P = $140
P = 400 – 5Q (inverse market demand)
a. $140 = 400 – 5Q
Q=?
5Q = 400 - $140
Q = 52
So each firm will produce 52 units and the total market output (Q) will be
4firms x 52 units/firms = 208 units
Each firm sets its price at $140, so the market price is also $140
b. TR = P x Q
= $140 X 52
= $7.280
Since TR = TC for each firm, there are no economic profits or losses in this
Bertrand Oligopoly.
So the equilibrium level of output in the market is 208 units, the equilibrium
market price is $140 and the profits of each firm are $0
(Soal 8)
3. Consider a homogeneous-product duopoly where each firm initially produces at a
constant marginal cost of $200 and there are no fixed costs. Determine what would
happen to each firm’s equilibrium output and profits if firm 2’s marginal cost increased to
$210 but firm 1’s marginal cost remained constant at $200 in each of the following
settings: (LO1, LO2, LO3)
a. Cournot duopoly.
b. Sweezy oligopoly
Answer :
Given : MC = $200
a. Cournot Duopoly
Firm 1's output and profits would increase.
Firm 2's output and profits would decrease.
With an increase in firm 2's marginal cost to $210, firm 2's cost of production
increases.
This means that firm 2 will likely reduce its quantity produced compared to the
original Cournot equilibrium.
Since firm 2 reduces its output, firm 1, facing the same demand curve and having
a constant marginal cost of $200, can increase its output without changing its cost
structure.
This leads to an increase in output and profits of firm 1.
In general, in the Cournot duopoly model, firms compete on quantity.
When one company's costs increase, it often leads to a redistribution of market
share and profits, helping the other company gain a competitive advantage.
b. Sweezy Oligopoly
There will likely be no change in output or profits. In a Sweezy oligopoly, firms
often do not fully adjust their production in response to cost changes.
They have some market power and may not be producing at a level that would
minimize their costs.
 Even if Firm 2's marginal cost increases to $210, this does not necessarily mean
that Firm 2 will reduce output significantly.
In a Sweezy oligopoly, firms can maintain current production levels to avoid
price wars or maintain market share.
Since firm 1's marginal cost remains at $200 and firm 2's output is uncertain, it is
possible that market conditions will not change significantly, resulting in no
significant change in output.
output or profit of either company.
Therefore, in Sweezy's oligopoly, there would likely be no significant change in
either firm's output or profits in response to an increase in firm 2's marginal
costs.

(Soal 10)
4. Suppose a single firm produces all of the output in a contestable market. Analysts
determine that the market inverse demand function is P = 150 − 2Q, and the firm’s cost
function is C(Q) = 4Q. Determine the firm’s equilibrium price and corresponding profits.
(LO4)
Answer :
Given : P -= 150 -2Q (market inverse demand function)
C(Q) = 4Q (firm’s cost function)

Set the firm's MC equal to the market price (P) to find the profit-maximizing level of
output (Q).
MC = P
4Q = 150 - 2Q

Q=?
6Q = 150
Q = 25
calculate the equilibrium Price (P) using the market demand function:
P = 150 - 2Q
P = 150 - 2(25)
P = 150 - 50
P = 100

Calculate the firm's Total Revenue (TR) at the equilibrium quantity:

TR = P * Q
TR = 100 * 25
TR = 2500

Calculate the firm's Total Cost (TC) at the equilibrium quantity using the cost function:
TC = C(Q)
TC = 4Q
TC = 4 * 25
TC = 100

Calculate the firm's profit (π) at the equilibrium quantity:

π = TR - TC
π = 2500 - 100
π = 2400

So, the firm's equilibrium price is $100, and its corresponding profits are $2,400.