A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL-300 - (2.5) P The competitive fringe supply function (total): Q=2P-12 The dominant firms marginal cost function: MC = 12 + (14) QD. a) What is the equilibrium price set by the dominant firm? b) How much will the competitive fringe supply to the market at the price found in question (a)? Show the answers graphically.
Q: 2. Explain what will be the result of cheaper sugar used in production of cakes at Bread Talks. What…
A: Demand and supply are two factors which determine the price and quantity level at equilibrium where…
Q: Suppose that the labor market is in equilibrium. The government has decided to implement minimum…
A: A price floor is one of the methods by which the government implements a legal minimum price in the…
Q: Consider the following tax slab for calculating the average tax rate and marginal tax rate. Income…
A: The marginal tax rate is the amount of additional tax paid for every additional dollar earned as…
Q: The graph shows the supply curve of sweaters. Now the number of suppliers of sweaters decreases and…
A: Law of supply states that, keeping other factors constant, an increase in price results in an…
Q: According to Sandra Postel in "Getting More Crop per Drop," one year after the solar-drip irrigation…
A: Sandra Postel is an author and environmentalist who has written about water conservation and…
Q: There are two shows on Netflix that Jeff can watch, Show 1 and Show 2. X₁ measures the number of…
A: The utility function refers to all those commodity bundles that derive the same amount of utility…
Q: Suppose that the labor market is in equilibrium. The government has decided to implement a minimum…
A: Lorenz curve graphically shows the income inequality that exists in a country using the cumulative…
Q: Give typing answer with explanation and conclusion Grande Zot, Inc., an electronics manufacturer,…
A: This pricing strategy may be based on several factors such as market competition, customer demand,…
Q: The government can help solve the problem of adverse selection in each of these ways EXCEPT: a.…
A: Adverse selection refers to a situation in which one party involved in a transaction has access to…
Q: Suppose that friend A suggests the price increase to increase the total revenue and on the other…
A: Elasticity measures the responsiveness or sensitivity of demand or supply to changes in price or…
Q: Since under the assumptions of the CAPM model, building a well-diversified portfolio is neither more…
A: CAPM Model:The CAPM model or the Capital Asset Pricing Model, is a financial model used to determine…
Q: Company ABC is considering investing in a project whose initial cost is $183000. It saves $48000 in…
A: Initial cost = $183000Saving in the first year = $48000 increases by $5400 each yearM&O cost at…
Q: Assume that the marginal cost of hiring additional labor (MCL), the market supply of labor (SL), and…
A: Demand curve is the downward sloping curve due to its negative relation with the price. Supply curve…
Q: How would you discuss competitive advantage and how a company estimates their own competitive…
A: Economic advantage refers to the ability of an individual, company, or country to achieve superior…
Q: The supply and demand functions of a company are P = In(Q+3) and P = In (56) — In(Q+2),…
A: Equilibrium point is achieved at the point where supply of a product is equal to its demand .
Q: Let’s pretend the economy is in a horrible recession, inflation is rising, and interest rates are…
A: In a hypothetical scenario where the economy is experiencing a severe recession, rising inflation,…
Q: A commercial bank has total deposits of $500 million. The reserve requirement set by the central…
A: Required reserves refer to the minimum amount of funds that commercial banks are mandated to hold in…
Q: What can be determined by the slope of the curve. The relationship between the relative price of…
A: “Since you have posted multiple questions, we will provide the solution only to the first question…
Q: 5. Which of the following reasons explains why the Great Depression had such a powerful effect on…
A: The Great Depression was a severe economic meltdown. It initiated from Country U and then spread…
Q: Draw graphs and explain in no more than five sentences the effects on the equilibrium real interest…
A: We will draw the graph and explain the effects on the equilibrium real interest rate (r) and…
Q: Estimate the exposure b to the exchange risk.
A: Exchange rate risk is the risk that arises from the change in value of one currency against another.…
Q: Refer to the table below to answer the following questions. Table 10.2.1 Oa 2 teapots. O b. 9…
A: Marginal product refers to the additional output produced by employing one additional unit of a…
Q: Consider the two-period endowment economy discussed in class. The economy is populated by m…
A: The real interest rate effect refers to the impact of changes in interest rates on economic…
Q: A firm that wishes to maximize profits will continue to purchase capital goods until the O nominal…
A: A firm that wishes to maximize profits will continue to purchase capital goods until the real rental…
Q: Consider a cartel in which each firm has identical and constant marginal costs. If the cartel…
A: A cartel is a formal agreement or collaboration among a group of independent firms or producers in…
Q: 3. Answer the following numerical questions about the IS-FX model. a. The consumption function…
A: In the following answers, we will address several numerical questions related to the IS-FX model. We…
Q: 1. Consider the National Income Model: Y = C + Io + Go C = a +B(Y-T) T = y + SY a. Define and…
A: Note: Since you have asked to solve from part d. I have solved for part d. Given: The National…
Q: Q4) What is price discrimination. What are its types and how it affects production and prices?
A: Price discrimination means the practice of charging different prices for the same product or service…
Q: Refer to the table below. If the information pertains to the demand curve and the long run average…
A: A natural monopoly is a market situation where a single company can efficiently provide a good or…
Q: NAME THE FOOD MENU THAT FOUND IN CASUAL AND FINE DINE RESTAURANT SCRAMBLE WORDS 1. KCINHNEC GESTGUN…
A: Hello and welcome to our fun food menu scramble game! In this challenge, we have scrambled the names…
Q: Suppose the government is trying to determine how to deal with pesticide contamination of its water…
A: Government has two alternatives to deal with contamination -# Municipal Treatment Plant : Initial…
Q: For the healthcare organization and medical insurance, Discuss at least three positive and negative…
A: 1. Expanding Access to Healthcare:The Affordable Care Act (ACA) has significantly expanded access to…
Q: 2. Consider the market model: a. Provide an economic interpretation to each of the equations. In…
A: The market model is a theoretical framework used to analyze the interaction of supply and demand in…
Q: Use the following table to answer the next two questions. Taxable Income Up to $10,000…
A: Authorities employ taxes for gathering funds from people and companies for the purpose to finance…
Q: Wage Rate tion 20 Wo W₁ W₂ W3 0 Q3 MRC Q₂ Q₁ Employment O W₂, and Q₁ workers would be hired. OW₂,…
A: In monopsonist market, there is only one firm or buyer demanding the labor.
Q: lowing mathematical form: Q=y[SK+ (1-8)L-P]-V/P here y is an efficiency parameter that shows the…
A: Where Y is an Efficiency Parameter ∂ is Distribution Parameter P is the Substitution Parameter
Q: Calculate the price elasticity using the below graph: Quantity 52 33 a) 0.41423 b) 0.32151 c)…
A: Price elasticity is calculated as the percentage change in quantity divided by the percentage change…
Q: Explain two reasons why it might be difficult at times to determine the exact rate of unemployment…
A: Determining the precise cost of unemployment in a country can be a challenging task due to various…
Q: Given the linear production function: Log (Q) = 1.5 + 0.76 Log (L) + 0.24 Log (K) Where Q is the…
A: The production function determines all the input bundles that produce the same output level.The…
Q: Price level (GDP defiator, 2009-100 130 120 3110 100 90 - 90. LAS SAS X AD In the above figure, when…
A: In macroeconomics, the long-run equilibrium is a concept that combines the aggregate demand (AD) and…
Q: Which would NOT shift the supply curve? O an improvement in available technology O an increase in…
A: The supply curve demonstrates the correlation between the price of a particular good and the…
Q: Use the figure below to answer the following question. Price 5 Multiple Choice 2 Quantity point 1 to…
A: The demanded quantity of any commodity reflects the amount of that commodity an individual is…
Q: Suppose that a paper mill “feeds” a downstream box mill. For the downstream mill, the marginal…
A: Total revenue determines the amount earned from the quantity produced.Economic costs involve not…
Q: Consider the following cash flow and calculate the NPV of the project with a discount rate of 10%.…
A: Net present value is given as NPV=Rt/(1+i)^tWhere Rt=return in period ti=discount rate=10%t=time…
Q: Consider the following ANOVA table below. Some parts are blank intentionally. The number of…
A:
Q: Suppose that there is a person- Person A. Person A quits her job where she earned $30,000 per year.…
A: An explicit cost is a direct payment made to others in the course of running a business, such as…
Q: For direct price discrimination to work a. The firm must be able to identify the members of the…
A: Manufacturing and marketing choices in economics include determining the optimal quantity of output…
Q: The short-run economic outcome resulting from the increa in production costs is known as Suppose now…
A: The SRAS curve demonstrates that the amount of real GDP that will be generated in an economy…
Q: Suppose the following graph shows the aggregate demand curve for this economy. The Fed's polics the…
A: Government securities are refers to the financial instruments issued by the government to borrow…
Q: TudorL X₁ Low price CL=10: Tudor's low cost Prób z Nature Xo CH-15: Tudor's high cost Prob1-z TudorH…
A: In game theory, a pure strategy equilibrium refers to a situation in a game where each player…
Step by step
Solved in 3 steps with 4 images
- Suppose Firm X is a dominant firm in a market where the market demand is Q = 1200 -2p. Once Firm X sets its price, those small competitors set their prices a little lower so that they can always sell up to their capacity. Assume the small firms’ combined capacity is 100 units. Further assume Firm X’s marginal cost is 50. Answer the following questions. Let Q^D be the quantity produced by the dominant firm. Write down the residual demand function faced by Firm X. (Hint: Think about how Q and Q^D are related.) Find Firm X’s profit-maximizing price.12- Suppose the market for tennis shoes has one dominant firm and five fringe firms, The market demand is Q = 200- 2P. The dominant firm has a constant marginal cost of 10. The fringe firms each have a marginal cost of MC = 10+ 5q. What is the dominant firm's demand curve? Qd = 200 - 2P b) Qd = 420 - 3P Qd = 210- 3P d) Qd = 200- 7PSuppose the market demand for a homogeneous product is given by Q = a - bP, where a and b are positive constants. The product is supplied by a dominant firm with a constant marginal cost c > 0 and n competitive fringe firms, each of which has a cost function ci(qi) = (qi^2)/(2ki) for i = 1, ... , n, where ki > 0 is a parameter. Suppose the dominant firm moves first by setting a price P, followed by competitive fringe rms setting their quantities, taking the price as given. a). Compute the equilibrium price and quantity level for each firm. b). How does the presence of competitive fringe firms affect the equilibrium price, as compared to the monopoly price by the dominant firm?
- . (Requires calculus). In the model of a dominant firm, assume that the fringe supply curve is given by Q = -1 + 0.2P, where P is market price and Q is output. Demand is given by Q = 11 – P.What will price and output be if there is no dominant firm? Now assume that there is a dominant firm, whose marginal cost is constant at $6. Derive the residual demand curve that it faces and calculate its profit-maximizing output and price. highest bidder, but both the winning and losing bidders must pay her their bids. So if Jones bids $1 they pay a total of $3, but Jones gets the money, leaving him with a net gain of $98 and Smith with -$1. If both bid the same amount, the $100 is split evenly between them. Assume that each of them has only two $1 bills on hand, leaving three possible bids: $0, $1 or $2. Write out the payoff matrix for this game, and then find its Nash equilibrium.Consider a market in which the demand curve is given by: P = 300 – Q Total costs for the industry is given by TC 20Q. (a) What is the competitive price? What are industry profits? (b) Represent your answers in a graph and shade the area of consumer surplus, producer surplus and any efficiency loss for the market structure. (c) What is the monopoly price? What are profits? (d) Represent your answers in a graph and shade the area of consumer surplus, producer surplus and any efficiency loss for the market structure. (e) Calculate the Lerner Index.A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL=300 – (2.5) P The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function: MC = 12 + (1⁄2)QD. a) What is the equilibrium price set by the dominant firm? Calculate the total market demand at the price found. b) How much will the competitive fringe supply to the market at the price found in question 2(a)? c) How much will the dominant firm supply to the market at the price found in question 2(a)? d) Show the above answers graphically.
- Consider the fish market where demand is given by the following equation: P=52-Q where P is the price in dollars and Q is the quantity in kilos. All firms are identical and the marginal cost is 12. 15-If the market were competitive, what would the price be and how many units would be produced? You must provide your calculations. 16-If the market was made up of only one firm (a monopoly), what would the price be and how many units would be produced? You must provide your calculations. 17-If the market was made up of two firms (a duopoly) and they chose their level of production simultaneously: what would the price be and how many units would be produced by each firm? You must provide your calculations. 18-If the market was made up of two firms (a duopoly) and firm 2 was dominant (i.e. it chose its level of production first): what would the price be and how many units would be produced by each firm? You must provide your calculations. 19-Compare the quantities produced by each of the…A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL=300 – (2.5) P The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function: MC = 12 + (1⁄2) QD. a) What is the equilibrium price set by the dominant firm? b) Calculate the total market demand at the price found in question (a). Show the answers graphically.A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL=300 – (2.5) P The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function: MC = 12 + (1⁄2) QD. a) What is the equilibrium price set by the dominant firm? b) Calculate the total market demand at the price found in question (a). c) How much will the competitive fringe supply to the market at the price found in question (a)? d) How much will the dominant firm supply to the market at the price found in question (a)? Show the answers graphically.
- The figure shows the market demand curve for penicillin, an antibiotic medicine. Initially, the market was supplied by perfectly competitive firms Later, the government granted the exclusive right to produce and sell penicillin to one firm. The figure also shows the marginal revenue curve (MR) of the firm once it begins to operate as a monopoly. The marginal cost is constant at $3, irrespective of the market structure What is the surplus enjoyed by the firm when it is the sole supplier of the medicine? OA. 590 OB. $180 OC. $30 OD. $60 Price/Cost (5) 10 1 10 20 30 40 MR Demand 50 60 70 80 90 Quantity (units)Let us consider a market where 10 firms I= {1,2,.,10} compete à la Cournot (quantity- setting competition). The inverse demand function is given by p( Q) =1200-18Q , where Q= Eiqi. The cost function is homogeneous and it is C( q ) =10q. 1.the profit functions of eachiEl is: 2.Derive the best reply functions for each firm 3.Derive the market price in the Nash equilibrium of the game. 4. The market price in the Nash equilibrium of the game is:Asap Plz Suppose that a firm with market power can perfectly price-discriminate and faces the demand function q = 400- 4P. The firm's marginal costs are given by MC(q) = 2q +0.12q 2. If the firm cannot price-discriminate, the profit-maximizing level of output is 20.27, and the optimal price is $94.9325 Identify consumer surplus and producer surplus in the market when the firm cannot price discriminate, assuming that the firm maximizes profits. Calculate the deadweight loss from market power. Round your answers to two decimal places.consumer surplus: $______producer surplus: $________dead weight loss: $_____