Question One Consider the market for snowmobiles in Wisconsin. There are two major producers, Avalanche and

Question One
Consider the market for snowmobiles in Wisconsin. There are two major producers, Avalanche and
IceRunner. The demand for snowmobiles is characterized by the following equation:
P = 3400 – A – I,
represents the number of snowmobiles Avalanche produces and
represents the number of snowmobiles IceRunner produces in a year.
The two companies have the same cost structures. Each have a marginal cost that is equal to average cost equal to 400 for every level of output.
Make sure to explain clearly how you are solving the problem and show your work.
This is a Cournot situation where Avalanche and IceRunner choose output simultaneously. They are building the snowmobiles in the current year and then selling them for the price determined by the market in the next year. In the Nash equilibrium identify
1) the quantities chosen by Avalanche and IceRunner,
2) the market price that will result,
3) , and the profits received by Avalanche and IceRunner.
Make sure to explain clearly how you are solving the problem and show your work. (15 points)
Say that Avalanche and IceRunner decided to form a cartel. If the cartel were successful, what would be
1) the combined output,
2) the price,
3 and the combined profits
for the two companies in the snowmobile market? how you found this answer (10 points)
Say Avalanche and IceRunner had made an agreement to each produce half of the combined output the successful cartel would choose. IceRunner moves first and produces exactly that amount. Do you believe that a profit maximizing Avalanche will hold to the agreement? In the course of your analysis of this decision, show what would be the profit maximizing output choice that Avalanche would make given that Avalanche has seen the output that IceRunner has produced at that point. Make sure that you explain why you choose this output (5 points)

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10