Chillman Motors, Inc., is an oligopolist and faces the following kinked demand curve: Price and cost ($/Unit) 200 180 160 140 120 100 80 60 40 20 0 0 10 20 30 40 50 Quantity P = 2000.4Q if 0 ≤ Q≤ 50 P = 2802Q if Q> 50 60 The demand function can be expressed algebraically as: TC = 500+50Q +0.5Q² 70 80 90 100 Chillman's total cost function is as follows: A MR MC Calculate the marginal revenue (MR) function facing Chillman and plot it on the graph using the green points (triangle symbols). (Hint: Start with (0,200) and end at (70, 0). Use all four points.) ? Using the orange line (square symbols), plot the marginal cost curve on the graph.
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- Barnacle Industries was awarded a patent over 15 years ago for a unique industrial strength cleaner that removes barnacles and other particles from the hulls of ships. Thanks to its monopoly position, Barnacle has earned more than $160 million over the past decade. Its customers—spanning the gamut from cruise lines to freighters—use the product because it reduces their fuel bills. The annual (inverse) demand function for Barnacle’s product is given by P = 380 -0.00009Q,and Barnacle’s cost function is given by C(Q) = 270Q. Thanks to subsidies stemming from an energy bill passed by Congress nearly two decades ago, Barnacle does not have any fixed costs: The federal government essentially pays for the plant and capital equipment required to make this energy-saving product. Absent this subsidy, Barnacle’s fixed costs would be about $9 million annually. Knowing that the company’s patent will soon expire, Marge, Barnacle’s manager, is concerned that entrants will qualify for the subsidy,…Barnacle Industries was awarded a patent over 15 years ago for a unique industrial strength cleaner that removes barnacles and other particles from the hulls of ships. Thanks to its monopoly position, Barnacle has earned more than $160 million over the past decade. Its customers—spanning the gamut from cruise lines to freighters—use the product because it reduces their fuel bills. The annual (inverse) demand function for Barnacle’s product is given by P = 350 -0.00008Q, and Barnacle’s cost function is given by C(Q) = 270Q. Thanks to subsidies stemming from an energy bill passed by Congress nearly two decades ago, Barnacle does not have any fixed costs: The federal government essentially pays for the plant and capital equipment required to make this energy-saving product.Absent this subsidy, Barnacle’s fixed costs would be about $8 million annually. Knowing that the company’s patent will soon expire, Marge, Barnacle’s manager, is concerned that entrants will qualify for the subsidy,…Barnacle Industries was awarded a patent over 15 years ago for a unique industrial-strength cleaner that removes barnacles and other particles from the hulls of ships. Thanks to its monopoly position, Barnacle has earned more than $160 million over the past decade. Its customers—spanning the gamut from cruise lines to freighters—use the product because it reduces their fuel bills. The annual (inverse) demand function for Barnacle’s product is given by P = 400 – .0005Q, and Barnacle’s cost function is given by C(Q) = 250Q. Thanks to subsidies stemming from an energy bill passed by Congress nearly two decades ago, Barnacle does not have any fixed costs: The federal government essentially pays for the plant and capital equipment required to make this energy-saving product.Absent this subsidy, Barnacle’s fixed costs would be about $4 million annually. Knowing that the company’s patent will soon expire, Marge, Barnacle’s manager, is concerned that entrants will qualify for the subsidy,…
- Barnacle Industries was awarded a patent over 15 years ago for a unique industrial-strength cleaner that removes barnacles and other particles from the hulls of ships. Thanks to its monopoly position, Barnacle has earned more than $160 million over the past decade. Its customers—spanning the gamut from cruise lines to freighters—use the product because it reduces their fuel bills. The annual (inverse) demand function for Barnacle’s product is given by P = 400 − 0.0005Q, and Barnacle’s cost function is given by C(Q) = 250Q. Thanks to subsidies stemming from an energy bill passed by Congress nearly two decades ago, Barnacle does not have any fixed costs: The federal government essentially pays for the plant and capital equipment required to make this energy-saving product. Absent this subsidy, Barnacle’s fixed costs would be about $4 million annually. Knowing that the company’s patent will soon expire, Marge, Barnacle’s manager, is concerned that entrants will qualify for the subsidy,…A market analysis employed by the “Sad Student Company” reveals that the number oflots of the game named “Handsome Killer: Revenge of the Teacher” ordered by thewholesalers when the game is offered at a price of dollars per lot is given by the formula:p=1500-2.5qa) Find the company’s total, marginal and average revenues b) Find the price and quantity maximizing the total revenue by first expressing therevenue as a function of price rather than of quantityA monopoly sells 30 units of output when price Ksh 12 and 40 units when price is Ksh 10. If its demand schedule is linear, what is the specific form of the actual demand function? Use this function to predict quantity sold when price is Ksh 8. What domain restrictions would you put on this demand function?
- Assume Ghacem Limited (Ghacem) continues to enjoy monopoly power over the production and sale of cement products in Ghana and operates with marginal costs of Ghs10 and sells to two sets ofconsumers. It is estimated that each set ofconsumers is made up of20 buyers. The individual demand function for the first set of consumers (A) is given by: QA(P) = 20 - P; and for the second set of consumers (B) it's given as: QB(P) = 16 - P; Using the above information estimate market output(s), price(s) and profits for both set of consumers under the following condition(s): 1. If Ghacem cannot prevent arbitrage ii. If Ghacem is able to prevent arbitrage but has no knowledge about the type of consumers it is dealing with. iii. If Ghacem is capable of preventing arbitrage between the different set ofconsumers but not within consumers in the same group. iv. If Ghacem can now identify all its consumers and can prevent arbitrage both between and within groups of consumers.Perum Perindo operates 2,500 hectares of shrimp pond in Bratasena, Lampung. There are many players in this market, including the traditional shrimp farmers and big companies listed in the IDX stock market. The product in this market is relatively standardized. It is known that perum Perindo total cost function is TC = 20 + 4Q + 0.003Q2 and the market price for a kilo of shrimp is $16. d. Write the firm variable cost and average variable cost functione. At the equilibrium level of output that has been calculated in question c , find the firm average variable cost (AVC)f. At current price level, should the firm continue to produce or shut down it operation? ExplainThe global pandemic 2020 has promoted a race to capture the market for introducing effective vaccine and treatments. a)- If PFIZER is the sole vaccine provider given the following information, answer the questions below: Output Price/Unit Total Cost 1 5500 1000 2 5000 1200 3 4500 1500 4 4000 2500 5 3500 4000 6 3000 5700 7 2500 7500 8 2000 9400 9 1500 11400 10 1000 13500 Given the tabular information above find the profit-maximizing output and price also illustrate the same using the two-dimensional labeled diagram. Show the calculation as well. (use excel) b)- Assume if many firms enter into the business of providing vaccine determine: How the demand curve of PFIZER would change and how it would now maximize its profit? The kind of market structure now PFIZER is forced to operate in? Also, illustrate the same using…
- The global pandemic 2020 has promoted a race to capture the market for introducing effective vaccine and treatments. If PFIZER is the sole vaccine provider given the following information, answer the questions below: Output Price/Unit Total Cost 1 5500 1000 2 5000 1200 3 4500 1500 4 4000 2500 5 3500 4000 6 3000 5700 7 2500 7500 8 2000 9400 9 1500 11400 10 1000 13500 Given the tabular information above find the profit-maximizing output and price also illustrate the same using the two-dimensional labeled diagram. Show the calculation as well. Assume if many firms enter into the business of providing vaccine determine: How the demand curve of PFIZER would change and how it would now maximize its profit? The kind of market structure now PFIZER is forced to operate in? Also, illustrate the same using the two-dimensional…In the packaged energy drink industry, there are only two companies that have the same relative strength in the market, namely “Pocary” and “Ion-1000”. It is known that the demand function in the market for this industry is as follows: Q = 1000 - 0.1P. Where Q in the market is supplied by these 2 companies. It is known that the total cost of the company is TC = 2q2 while for Ion-1000 is TC = 2.5q2 a. If these 2 companies collude, what is the price and quantity offered in the market at equilibrium, and calculate the profit of each company? b. If these 2 companies compete, look for the best respond function of each company, and what is the price and quantity offered in the market at equilibrium, and calculate the profit of each company? c. Make it in the game theory form of the two strategies "Collusion" and "Compete" and look for "Nash Equilibrium" in just one game? (Note, if one is a collusion strategy, then the quantity produced collusion strategy is the same as the calculation result…The demand curve for CO2 systems can be considered as a kinked demand curve. One analysis company has helped and they find that the kink occurs at around 15 plants sold at a price of DKK 4.4 million. DKK per plant. At a price increase based on the kink, the analysis company estimates the price elasticity to -2. Furthermore, the analysis company has found that at a price of DKK 0, it the requested quantity is 40 plants. Derive and draw the kinked demand function and the associated MR function based on the given data. If necessary, make other necessary assumptions yourself.