Consider a market with 3 Cournot firms producing a homogeneous product. Consumer demand is given by P = 130 – Q. Each firm's total costs are given by C = f + 10g, where f represents fixed costs. Suppose that firms 1 and 2 merge and that after the merger, the merged firm has fixed costsof af with 1 < a < 2. Under which condition is this merger profitable for the merging firms? O a. a<2- 200/S O b. None of the options given are correct Oc a<2-100/f O d. a<2-150/f Oe a<2-50/f
Q: Price agreement Break the agreement Perlis Price agreement (3,2) A (-1,3) B Break the (4,-1) C (0,0)...
A: 17) Nash equilibrium is the strategy in the game from which no player has an incentive to deviate. ...
Q: When discussing the appearance of "real people" in documentary films, Bill Nichols uses the term liv...
A: A documentary film is a non-fictional motion picture that aims to educate the audience "Document the...
Q: 1. It is 1908 and you are the CEO of Ford Motor Company. General Motors started producing cars this ...
A: Profit-maximizing output level When the cost of manufacturing the final production unit equals the v...
Q: Fill in the marginal utilities for the table. Marginal utility falls by when the number of movie tic...
A: The utility gained from consuming an additional unit is referred to as marginal utility. Total utili...
Q: Questions:1. What kind of game (according to outcome and sequence) is Crandall proposing to Putnam?2...
A: 1. In terms of the result, Crandall is essentially offering to Putnam a positive-sum game, in which ...
Q: If the minimum wage is set below the equilibrium wage rate, then the following will hold true: A) W...
A: Minimum wage is definer as the least amount of wages that the producers have to pay to the workers f...
Q: If the central bank wants to achieve a long-run target inflation rate of p, at what rate should the ...
A: A money demand function displays the influence that some aggregate economic variable will have on th...
Q: f income increases and the demand for good decreases, then is good X a normal or inferior good? Is t...
A: Income Elasticity is a concept in economics that helps in the measurement of change in the quantity ...
Q: In the short run, when the output of a firm increases, its average fixed cost
A: To find : What will be average fixed cost.
Q: Suppose that investment demand increases by $100. Assume that households have a marginal propensi...
A: Increase in investment = 100 $ MPC = 80% or 0.8
Q: Which of the following statements is the least likely to be true? A) Automation requiring significa...
A: Automation alludes to the course of naturally delivering products using robots, control frameworks a...
Q: A significant property of the Cobb- Douglas production function is that the elasticity of substituti...
A: To find : Elasticity of substitution input will be between which value.
Q: What are the stipulations of the Temporary Assistance for Needy Families benefits? Select two correc...
A: Temporary assistant for Needy families benefits The United States' Temporary Aid for Needy Families ...
Q: 1.Explain the relationship between PPF and supply curve? 2.A recent news report suggested that unive...
A: (1) PPF is the production possibility frontier which shows the bundles of two goods which can be pro...
Q: 14. A man made ten annual end-of-year purchases of P1,000 common stock. At the end of 10th year he s...
A: The return on investment (ROI) is a rough estimate of the profitability of a certain investment.
Q: The money stock does not include demand deposits bank notes and coins O gold held by households trav...
A: Money stock is the monetary base. Money is used to buy goods and services.
Q: Which of the following is NOT a function of money? O a. A unit of account O b. A store of value O C....
A: Money has three primary functions which are mentioned in next step
Q: . Economies of scale are of two kinds
A: To find : What are types of economies of scale.
Q: Analyze the given news below and explain the concept of inflation using the data presented, i.e food...
A: Inflation is defined as the rate of increase in the prices of goods for a particular time period.
Q: 1. Given the demand function: Qd = 50- 4P, a Construct a demand schedule for the following prices: 1...
A: Demand refers to the quantity of the commodity which the consumers purchase at different prices duri...
Q: The type of inequality before (pre) taxes and transfers are applied is called NET income inequality,...
A: Correct Answer: FALSE Reason: The type of inequality before (pre) taxes and transfers are applied ...
Q: Why has the human population continued to grow despite environmental limitations? Do you think this ...
A: In democratic government it has been the notion that there is both public and private sector involve...
Q: For the following questions, make use of provided information. Since the peak of the pandemic shutdo...
A: Increasing the interest rate would only attract customers who are willing to invest and like to incr...
Q: Info for the following two questions: Consider the sequential game below, with two players (1 and 2)...
A: Answer -
Q: An increase in the money demand, with money supply held constant, means that we will observe O a. A ...
A: Equilibrium interest rate is determined where quantity of money demanded equals quantity of money su...
Q: Item# What is needed# Quantity needed A B. Week 467 A Gross req. 60 20 150 1 Item# On hand (beginnin...
A: Production function means the relationship between inputs and output. It means the output is produce...
Q: For the following questions, make use of provided information. Since the peak of the pandemic shutdo...
A: Money supply means the supply of currency into the economy. It means the money moves by the Federal ...
Q: Figure 9-16 $/q MC 6.70 6.00 ATC 4.90 AVC d = MR 4.00 2.80 2.60 b. 6 8 12 14 If the price-taker firm...
A: A perfectly competitive firm is a price taker and accepts the price as given.
Q: Money demand is likely to increase the most during which part of the business cycl A. recession B. t...
A: Business cycle refers to series of economic expansion and contraction.
Q: Suppose the market for petrol in an economy is monopolised and the market supply is given by Q= 2P a...
A:
Q: The table shows the total utility and marginal utility for ice cream consumption. In the table, the ...
A: In economics, utility refers to the usefulness or enjoyment that a consumer can derive from a servic...
Q: 80 70 SWE DEN NOR 60 NLD FIN 50 NZL JPN CHE CAN AUS 40 AUT ESP "IRL ITA DEU USA 30 GBR BEL GRC ISR 2...
A: i. Statement 1: R square measures the goodness of the fit not the direction of the relation. We can ...
Q: ne tax rate in an attempt to decrease a country's de- y not be effective because a. All of the answe...
A: GDP = GROSS Domestic product
Q: The formal study of economics began when Adam Smith (1723-1790) published his famous book The Wealth...
A: Adam Smith otherwise called father of financial aspects distributed his book The enquiry into The na...
Q: Price MC MC, = S 1 Quantity Figure 9 Demand curve and marginal private and social cost curves Toward...
A: Externality refers to spill-over effect of a good or service on third party which is not involved in...
Q: a Defue Bertrand reaction functios ond repriest diagrmadicalky W Derve Bertrond equilebah gouuttes A...
A: Given, There are Two firms : Firm 1 and Firm 2Both the firms are in Bertrand CompetitionMarginal Co...
Q: If, next year, the production possibilities curve passes through point W on which point on this year...
A: Production Possibility curve is the locus of different combinations of two goods that a country can ...
Q: what do you understand about unemployment rate among young graduates?
A: Unemployment is referred to be a situation whereby a person who has the ability to work and is also ...
Q: 2. Suppose the demand function in Number 1 becomes Qd = 40 - 4P. a Add the new demand schedule to th...
A: Introduction Demand function of number 1 has given. Qd = 40 - 4P Table of the above demand function ...
Q: Exercise 2 Consider a small open economy. Assume that GDP (Y) is 5000. Consumption (C) is given by t...
A: Dear learner you have posted a question with multiple subparts, we have solved only first three sub ...
Q: 52. When - we know that the firms are earning just normal profits. A. O AC = AR В. О МС %3DMR С. О М...
A: The average revenue is the amount of revenue earned per unit of output and the average cost is the c...
Q: Explain the concept and theory for the equity premium puzzle (EPP), and evaluate these behavioural e...
A: The equity premium puzzle (EPP) refers to stocks' unusually high historical outperformance over Trea...
Q: As the general price level changes, substitution bias in price indices results in underestimation of...
A: The measure that depicts changes over time of goods and services that consumers tend to purchase for...
Q: Suppose the evening news anchor announces that "The Bank of Canada Raises the Target Overnight Rate ...
A: Target overnight rate is the interest rate at which banks borrow and lend from one another in the ma...
Q: 3. A firm has the following total Corst and demand function C=}Q-7Q+ liQ + So, Q = 100-P %3D a. Writ...
A: Total revenue is the product of price and quantity. Profit is the difference between revenue and cos...
Q: The figure below shows a market of good C. Suppose that the government levied a tax on C. Answer...
A: Price buyers pay after tax if the size of tax is 10 is 30 because tax of 10 will create a wedge betw...
Q: Global communications in the information age O 0. Connect populations living at distance from home c...
A: The sharing and development of information through nonverbal and verbal messages in international se...
Q: In 2018, Amazon raised the annual subscription fee for its Prime membership service, which provides ...
A: The markets are the place where the buyers and the sellers of various goods and services tend to mee...
Q: A firm has a fixed production cost of $1,000 and a constant marginal cost of production of $700 per ...
A: Given that, Total fixed cost (TFC) = $1,000 Marginal cost (MC) = $700 1)Total fixed cost remains con...
Q: Discuss it objectively
A: Through the movement of air in the atmosphere, the flow of water in rivers, and the migration of ani...
Step by step
Solved in 3 steps
- Think about firms such as the Coca Cola Company and PepsiCo who competeagainst each other in the monopolistically competitive market for soft drinks. Eachfirm produces a unique product, but each of these unique products is to some extenta substitute for the soft drinks produced by rival companies.Now imagine a situation where the firms within such a market are facing suchextreme competition that they are unable to make an operating profit. Characterisethis situation diagrammatically and explain what will happen to the market, payingparticular attention to the exit or entry of firms out of (or into) the market.There is much evidence that large firms with considerable market power (firms such asmonopolies) may not maximize profits but may pursue quite different objectives such asgrowth or sales revenue maximization. What are the arguments put forward to defendmonopoly? Name any 5 Generally, the aim of a business is to maximize profit. Which point should a firm operateat in order to achieve maximum profit? By making use of a graph indicate clearly the pointat which a firm makes maximum profit and a point where a firm increase their output inorder to enhance profit as well as well as the points where they should reduce theirproduction if they want to enhance profitIntel and Advanced Micro Devices make most of the chips that power a PC. What makes the market for PC chips a duopoly? The PC chip market is a duopoly if O A. at the efficient scale, two firms can satisfy the market demand OB. each firm can divide its consumers into two categories-business consumers and household consumers O C. the two firms can charge different prices for the same quality of PC chip O D. the market produces two goods Assume that Intel and Advanced Micro Devices have identical costs. The graph shows the market demand curve. Draw the average total cost curve of one firm if the chip market produces 800 chips an hour and other firms are prevented from entering. Label the curve. Draw a point on the average total cost curve at the efficient scale. 110- 100- 90- 80+ 70- 60+ 50- 40- 30- 20+ 10- 0- Price (dollars per chip) 0 $800 200 400 800 600 Quantity (chips per hour) >>> Draw only the objects specified in the question. D 1000 Q Q 1200
- Q² 4 PROBLEM (4) Firm A and Firm B with identical total costs TCA (QA) related goods and competing in prices (Bertrand competition), with demands: QA = 510 - 2PA + pв and Qв= 510 - 2pв+ pa, respectively. = and TCB (QB) Q² 4 are producing (a) Calculate the Bertrand-Nash equilibrium prices. (b) Calculate the prices they charge when A is the leader and sets its price first, anticipating B's best response and taking it into account (like in Stackelberg competition). (c) Calculate the prices they charge when they collude, in order to maximize sum of their profits.2 clothing manufacturers, LE and LL B, are deciding what price to charge for very similar field coats. Cost of producing these coats is $100. The coats are very close substitutes, so customers swarm to the seller that offers the lowest price. If both firms offer the same prices, each receives half of the customers. Assume the two firms have the choice of pricing at prices of $103, $102, or $101. The profit each firm would earn at various prices is shown in the payoff matrix below $103 ($150, $150) ($0, $200) ($0, $120) Lands' End $102 ($200, $0) ($100, $100) ($0, $120) $101. ($120, $0) ($120, $0) ($50, $50) What is the Nash equilibrium and expected profits to LLB and LE of this game? If this was a mixed strategy game in which LLB has a 25% percent chance of choosing a price of $101, a 25% chance of choosing price of $102, and a 50% chance of choosing $103, while LE has a1/3 chance of…Explain what is Oligopoly and duopoly? Are firms in Oligopoly large firms or small firms? What is product differentiation, price discrimination and profit maximization under Oligopoly? Give two examples each of product differentiation and price discrimination. What is the optimum point of production and minimum cost point of a firm under Oligopoly? Explain and draw AR and MR curves as (a) kinked demand curve; (b) Collusion (cartels) and (c) Price leadership model.
- Suppose that the least-possible cost of producing a car in 1901 is£250. Draw the average total cost curve for a car manufacturer in 1901 assuming thatthis market is a natural oligopoly with 3 firms.Question Suppose Coca Cola and PepsiCo are producing a new, healthy version of Coke and Pepsi. They are trying to figure out how much of this new soda to produce. They know: (i) If they both produce 10,000 liters a day, they will make the maximum attainable joint economic profit of $200,000 a day, or $100,000 a day each. (ii) If either firm produces 20,000 liters a day while the other produces 10,000 a day, the one that produces 20,000 liters will make an economic profit of $150,000 and the other will incur an economic loss of $50,000. (iii) If both produce 20,000 liters a day, each firm will make zero economic profit. (a) Describe the payoff matrix for the game that Coca Cola and PepsiCo must play. (b) Find the Nash equilibrium of the game that Coca Cola and PepsiCo play.Suppose that the demand in a particular industry is given by Qd = 100 2P. When the market price in the industry is $10 per unit, total demand in the industry is that each of the four largest firms in the industry sell 15 units. Based on this information, the four- Furtrermore, assume firm concentration ratio is Select one: A. 45 units; 0.75 B. 80 units; 1.00 O C. 80 units; 0.75 D. 45 units; 0.25
- Suppose that there are two firms producing a homogenous product and competing in Cournot fashion and let the market demand be given by Q = 120- Assume for simplicity that each firm operates with zero %3D total cost. Find Cournot Nash equilibrium total surplus. 12800 O 6400 O 13600 19200Which of the following is an assumption of the theory of oligopoly? O Firms produce and sell either homogeneous or differentiated products. O There are no barriers to entry. O a and c There are many sellers and many buyers.bok rint An oligopoly producing a homogeneous product is comprised of three firms that act like a cartel. Assume that these three firms have identical cost schedules. Assume also that if any one of these firms sets a price for the product, the other two firms charge the same price. As long as they all charge the same price they will share the market equally; and the quantity demanded of each will be the same. Below is the total-cost schedule of one of these firms and the demand schedule that confronts it when the other firms charge the same price as this firm. Complete the marginal-cost and marginal- revenue schedules facing the firm. erences Mc Graw Hill Output Total cost Marginal cost Price Quantity demanded Marginal revenue 0 1 23456 7 8 $0 180 300 480 720 1,020 1,380 1,800 2,280 Short Anewor LA JUL 26 $780 720 660 600 540 480 420 360 Toolbar navigation (a) What price would be charged, what output would be produced, and what profit would be made by this firm? (b) If the firms…