- Imagine there are 3 hot dog vendors on a linear beach 50 yards long. Assume: -Customers are evenly distributed along the beach, located at the endpoints and spaced 5 yards apart. -Production costs are 0. -Both vendors sell hot dogs for p dollars. -The cost to consumers of travel is 1 cent per yard. a. What are the profit-maximizing equilibrium locations, if any, for the three vendors? If there is an equilibrium, what do aggregate travel costs equal? b. What are the socially optimal locations, if any, to minimize travel costs? If there is a social optimum, what do aggregate travel costs equal?
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- 4. Firm A and firm B must decide whether to sell product X at a sales or a regular price. If both firms sell the product at a sales price, both firms earn a profit of 5. If both firms sell the product at the regular price, each firm earns a profit of 20. If firm B charges the regular price while firm A charges the sales price, firm A earns a profit of 60 while firm B has a loss of 15. If firm A charges the regular price while firm B charges a sales price, firm B earns a profit of 60 while firm A has a loss of 15. (a) Use the information to construct a payoff matrix for firms A and B. (b) Does firm A have a dominant strategy? (c) Does firm B have a dominant strategy? (d) What is the Nash Equilibrium for this game? Explain your answers.1. Suppose you are the economic adviser ofa company producing three brands of mobile pnones;Nokia 10, Samsung X and iPhone 7. Suppose further that, your company currently sells 120units of iPhone Z at e800 per unit, 150 units of Samsung X at e800 per unit and 200 units ofNokia 10 at e100 per unit, but in a bid to maximize profit, the company's managing directorproposes an increase in price of Samsung X from e800 to e1000 per unit for which quantitydemanded is anticipated to fall from 150 to 100 units; iPhone Z from e800 to e 1200 per unitfor which quantity demanded is anticipated to fall from 120 to 100 units; and Nokia 10 from100 to 200 per unit for which quantity demanded is expected to fall from 200 to 100 unitsUsing the mid-polint formula. compute the price elasticity of demand for each brand.From your answer in i, what is the type and economic interpretatiom of each brand'sii.value of elasticity.2. Briefly explain any three key features of a Perfect Competitive and a Monopolistic…Suppose a science museum charges $15 for admission, and each day 200 adults visit the museum. Suppose the museum directors cannot change the price they charge, but they know that for every $1000 a day spent on advertising they can increase demand by 50 tickets. The cost of operating the museum for a day is $2,000. Which of the following advertising choices should they make to maximize profits? O Spend $100O0 a day on advertising O Spend $2000 a day on advertising O Spend no money on advertising O Spend $3000 a day on advertising
- May and Raj me the only two growers who provide organically grown corn to a local grocery store. They know that if they cooperated and produced less corn, they could raise the price of the com. If they work independently, they will each earn 100. If they decide to work together and both lower their output, they call each earn 150. If one person lowers output and the other does not, the person who lowers output will earn $1 and the other person will capture the entire market and will earn 200. Table 10.6 represents the choices available to Mary and Raj. What is the best choice for Raj if he is sole that Mary will cooperate? If Mary thinks Raj will cheat, what should Mary do and why? What is the prisoners dilemma result? What is the preferred choice if they could ensure cooperation? A = Work independently; B = Cooperate and Lower Output. (Each results entry lists Rajs earnings first, and Marys earnings second.)Pls help with below homework. Fred owns his own specialty burger food truck. He's deciding on a price for his new burger called The Best Burger. Fred decides hel use markup pricing, and wants to mark it up 30%. The cost of goods for each burger is $4.50 and he can make up to 110 burgers a day. What wil the price of each burger be using markup pricing? Round to the nearest cent. O $15.00 O $6.43 O $5.85 O $7.65 O $7.07Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies. Minutes Needed to Number of Cellular Phones Programmed or Tested in a 40-Hour Week Program 1 Test 1 Cellular Phones Cellular Phones Cellular Phone Cellular Phone Programmed Tested Juanita 160 1200 Shantala 10 4. 240 600 Shantala has an absolute advantage in O a. programming cellular phones and a comparative advantage in testing cellular phones. O b. testing cellular phones and a comparative advantage in programming cellular phones. O c. testing cellular phones and a comparative advantage in testing cellular phones. O d. programming cellular phones and a comparative advantage in programming cellular phones.
- 2. Imagine there are 2 hot dog vendors on a linear beach 100 yards long. Assume: Customers are evenly distributed along the beach, located at the endpoints and spaced 5 yards apart. Production costs are 0. ● Both vendors sell hot dogs for p dollars. The cost to consumers of travel is 2 cents per yard. a. What are the profit-maximizing equilibrium locations, if any, for the three vendors? If there is an equilibrium, what do aggregate travel costs equal? b. What are the socially optimal locations, if any, to minimize travel costs? If there is a social optimum, what do aggregate travel costs equal?A study of ethanol as a transportation fuel reveals that the competitive equilibrium is expected to be at a price of $4 per gallon and a consumption rate of 100 million gallons/day. For a production rate of 10 million gallons/day, the marginal cost is found to be $1 per gallon. Also, a a price of $10 per gallon the demand is 10 million gallons/day. Answer the following questions for this system. 1. Determine the equations for the demand and marginal cost lines. 2. Calculate the consumer and producer surplus for the market equilibrium. 3. It was discovered later that the above information ignored a government subsidy of 50 cents per gallon. How will the demand and marginal cost lines, and the competitive equilibrium, change if this subsidy is removed?Consider Jimmy Choo designer shoes. In whatway does Jimmy Choo face many competitors? Inwhat way does Jimmy Choo face no competitors?
- Price and cost (dollars per ride) The graph shows the market for the two zipline firms that operate in a resort city. If the firms decide to compete, then together they will produce rides at a price of per ride. 60 O A. 400: $30 MC O B. 400; $50 50 O C. between 200 and 400: between $30 and $50 40 O D. 200: $30 O E. 200; $50 30 20 'D 10 MR 100 200 300 400 500 Quantity (number of rides)COURSE: MICROECONOMICS - Bertrand's ModelAssume that a market is supplied by 2 companies, whose total costs are: CTi = 100Respective demand of each is: q1 = 120 - 2p1 + p2 and q2 = 120 - 2p2 + p1It is requested to:(a) calculate the firms' profit and reaction function.(b) plot the market equilibrium price and reaction function(d) calculate equilibrium quantity produced by each firm(e) determine profits that both firms will have at equilibrium.2. The market for dark chocolate us characterized by Cournot duopolists - Honeydukes and Wonka industries. The market demand for dark chocolate is:P = 8 - 0.005Qdwhere P is the price per bar in dollars and Qd is dark chocolate's daily quantity demanded in bars (use qh to represent the quantity of dark chocolate sold by Honeydukes and qw to represent the quantity of dark chocolate sold by Wonka Industries). Honeydukes has a constant marginal cost of $2.50 per bar, while Wonka Industries has a constant marginal cost of $3.00 per bar. The firms move simultaneously in choosing their profit-maximizing quantity of output.a. Given the firms move simultaneously, what is the equation for Honeydukes' reaction function with qh expressed as a function of qw?b. Given the firms move simultaneously, what is the equation for Wonka's reaction function with qw expressed as a function of qh?c. What quantity of dark chocolate will each firm produce in equilibrium and what price will be established for a…