Two competing companies, A and B face the same unit cost of a product that is fixed and equal to 15 monetary units. The demand function for company A's product is Pa=65-2.5Qa and for B's product is Pb=60-2Qb. Calculate the Lerner index at the equilibrium position of each company. Comparing the index you found for company A with the index you found for company B what is found? If there is a difference between them, explain why it is due.

Q: Suppose a group of chess players gather and decide to rank themselves in "popularity". The…

A: Players are people who play games and use different kinds of strategies to win the games. Each…

Q: You are a new entrant in a market with just one Incumbent, who sells a roughly equivalent product.…

A: The inverse demand curve is the price which is the function of the quantity demanded. In a market…

Q: A market analysis employed by the “Sad Student Company” reveals that the number of lots of the game…

A: a)p=1500-2.5qTotal…

Q: Answer b and c   Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two…

A: Price dicrimination is a practice wherein the seller is able to charge a different price for…

Q: Consider an imperfectly competitive service provider, Muscat Automotive Repair Services (MARS),…

A: Price discrimination is a microeconomic strategy under which different prices are charged by the…

Q: Blue Skles Aviation is a manufacturer of small single-engine alrplanes. The company is relatively…

A: Given information P=740000-2000Q Cost of producing engine , Ce= 6000Qe2 Cost of assembling…

Q: You are a consultant on profit maximization. What do you recommend in each of the cases listed in…

A: Profit maximization is a process business firms undergo to ensure the best output and price levels…

Q: In 2008–2009, the price of jet and diesel fuel used by air freight companies decreased dramatically.…

A: Evaluation of given alternative in the context of decision making, with the available information in…

Q: Let g (D, y) be the profit when the order quantity is y and the demand is D. In the newsvendor…

A: Given information Profit function= g(D,y) here D=Demand  y=order quantity

Q: What is the likelihood that firms would enter the market in the short-run? Use COVID-19 as a market…

A: It would be very unlikely for a firm to enter a market in the short-run especially when going…

Q: From March 26 to July 17, 2020, the share price of The Champion SA (C share) fell by 17% and that of…

A: Fixed costs are those costs that do not depend on the quantity produced or sold by the firms.…

Q: A dominant or price setting firm and several smaller price takers serve a market where total market…

A: Demand for dominant firm is given by = Total market demand – quantities supplied by smaller firms…

Q: 15. Name three definitional conditions of the market model termed monopolistic competition. Explain…

A: Monopolistic competition aims to identify over the characteristics and it is many firms that can…

Q: You currently run a team that has 3 or more price levels with a total capacity of 2500. Present a…

A: Total revenue is that the full quantity of total sales of products and services.. It's computed by…

Q: An industry "cluster" arises because of the increase of productivity of the firms participating in…

A: An industry "cluster" refers to many industries popping up at the same place i.e. nearby each other…

Q: The Berber Corporation's total cost function is 200 9Q3Q2 МС - 9+6Q ТC where TC is the total cost in…

A: Burr Corp would select the point where Marginal Revenue (MR) is equal to Marginal cost (MC) to…

Q: The Lerner index at the equilibrium of the linear Cournot symmetric model is equal а-с to L (n) =…

A: Equilibrium price refers to the price under which the supply is equal to the demand in a perfectly…

Q: If two construction companies merge, this is called a ________ merger, whereas if a bakery merges…

A: When two companies in same industry merge, it is called horizontal merger. Whereas if two business…

Q: In a highly competitive market, we generally find very low Lerner Index values. Those market are…

A: Learner index: It is used to measure the market power of firms. Its value ranges between 0 to 1. It…

Q: Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and…

A: Solution a)The company's total profit function is given by :π (Q) = Total Revenue - Total Cost…

Q: Two companies produce similar items for the same market. Company 1 produces 91 items and Company 2…

A: Given information The demand function for the 2 firms in the market P=A-q1-q2 The cost function for…

Q: If market share for five cleaning service companies are 8%, 13%, 6%, 25%, and 48%, the…

A: The Herfindahl index is a measure of the size of firms in relation to the industry they are in and…

Q: If an industry consists of 20 firms holding equal market shares, the Herfindahl index is a. 400. b.…

A: Here, it is given that there are 20 firms in a market with equal market share.

Q: Which one of the following contributing factors of barriers to entry listed by Bain (1956) can be…

A: The following contributing factors of barriers to entry are all listed by Bain:…

Q: Two companies produce similar items for the same market. Company 1 produces 91 items and Company 2…

A:

Q: Herfindahl index bounds. Suppose you only know the value of the market shares for the largest m…

A: The lower bound of the Herfindahl index can be calculated from the percentage of market share of…

Q: Moe Green estimates the cost of future projects for a large contracting firm. Mr. Green uses…

A: Moe Green when he estimates the cost, he uses the same techniques to estimates the costs of every…

Q: Consider a market with a single manufacturer M that sells its product via two retailers. The…

A:

Q: B.A measure called Herfindahl-Hirschman Index is used to measure the degree of competition in an…

A: HHI is used by antitrust agencies to promote competition in the industry. It can be computed by…

Q: Market Failures in Imperfect Competition   Efficiency in exchange is satisfied with the equality…

A: a.  If there is a Monopoly in both the goods Market x and y px/py is the price ratio under Monopoly…

Q: What is the likelihood that firms would enter the market in the short-run? Use COVID-19 as a market…

A: The firms in the market would always want to earn positive economic profits in the short run after…

Q: A company produces three products which are interdependent. These are products A, B and C. The flow…

A: The technological coefficient matrix refers to the matrix of B. Matrix of B contains…

Q: Industry A consists of four firms, each of which has an equal share of the market. What is the…

A: Herfindahl - Hirschman index HHI = Sum of a square of market share. Suppose there are 'n' firms, and…

Q: Overall, the Degree of Rivalry in the North American Pharmaceuticals Industry is strong. The MOST…

A: Competitive rivalry is a measure of the extent of competition among existing firms. The Degree of…

Q: You are the manager of a firm that sells a “commodity” in a market that resembles perfect…

A: Answer in step 2

Q: Two companies produce similar items for the same market. Company 1 produces 9₁ items and Company 2…

A:

Q: A company has established that the relationship between the price for one of its products is…

A: Answer - Given in the question- P = 88.5 -0.08D0.75 Fixed cost = $45,000 Variable cost = $45 Part A…

Q: Ten firms compete in a market to sell product X. The total sales of all firms selling the product…

A: Total sales = GHS 1,000,000 Top four firm’s sales are: GHS175,000, GHS150,000, GHS125,000 and…

Q: A firm is jointly producing two products with variable proportions. If the price of one of the…

A: Profit maximization is the short run or long run process through which a firm might tend to…

Q: Suppose Samsunk sells her tablet computers at a price of $3,000. Estimates show that the…

A: Lerner index, in economics, a measure of the market power of a firm. Essentially, the index measures…

Q: Teletronics reported record profits of $100,000 last year and is on track to exceed those profits…

A: Given, The record profit of last year = $100,000, And currently, the company’s top manager is…

Q: Calculate the Herfindahl-Hirschman Index (HHI) for each of the following markets. Market A has two…

A: Here we calculate the herfindahl hirschman index and choose the correct option , so the calculation…

Q: Ilsa Fast raises sheep and sells wool at the market. The wool she sells is identical to her…

A: The seller is producing an identical good in the market and there are many sellers in the market.

Q: Suppose this firm has the capacity to produce up to 11 airplanes of this particular type. If the…

A: For maximizing Total Revenue the corporation would like to sell as much as they can produce. TR will…