WEEK 4 (DAY 1 AND 2) : THEORY OF VALUE : GENERAL ECONOMICS PAPER I : INDIAN ECONOMIC SERVICES
When I start writing notes for these videos, sometimes I get too consumed in the depth I can cover, but then nearly every time, I have to remind myself, that I have to stick to the syllabus which is given. While doing Cournot, or Bertrand or Stackelberg Model, there is so much, which I can discuss, but then given the trends in the past years and syllabus, have to restrain myself.
Also, while making these videos, I realised that it will be better, if we make notes in a question and answer format, it will have a better retention. In Indian economic services paper, this covers a part of Theory of Value (Pricing under different market forms)
Following questions, which were answered in today’s recordings are these :
- How does Cournot output in equilibrium compare with that of the perfect cartel? Explain mathematically and graphically.
2. Suppose market demand function is p(Q) = a-bQ, where b > 0. There are two firms, i =1,2. The cost function of the ith firm is Ci(qi) = c.qi. Derive equilibrium output, price and industry profits under following assumptions :
- Bertrand
- Cournot
- Perfect cartel
3. Analytically show that the Nash equilibrium in Bertrand equilibrium, with two firms and the homogenous cost structure, with constant MC, c for both the firms, is given by p1* = p2* = c
These are the snapshots of the videos which were recorded today. Two of my recordings, peak load pricing and Natural Monopoly got corrupted, so have to record them again tomorrow.
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Happy studying,
Nishant
