3. Because cooking soufflés is incredibly difficult, the supplyof soufflés in a small French town is controlled by two bak-ers, Gaston and Pierre. The demand for soufflés is givenby P=30-20, and the marginal and average total cost ofproducing soufflés is $6. Because baking a soufflé requiresa great deal of work and preparation, each morning Gastonand Pierre make a binding decision about how many souf-flés to bake.HomW buanolinmas-gitalprofa. Suppose that Pierre and Gaston agree to collude,evenly splitting the output a monopolist would makeand charging the monopoly price.i. Derive the equation for the monopolist's marginalrevenue curve. On obii. Determine thefor the cartel..profit-maximizingnebyliii. Determine the price Pierre and Gaston will be ableto charge.collective outputhostiv. Determine profits for Pierre and Gaston individu-ally, as well as for the cartel as a whole.b. Suppose that Pierre cheats on the cartel agreement bybaking one extra soufflé each morning.JORTEShailogonemi. What does the extra production do to the price ofsoufflés in the marketplace?ii. Calculate Pierre's profit. How much did he gain bycheating?iii. Calculate Gaston's profit. How much did Pierre'sdla obieccheating cost him?202080 BrV.Ynoinsamosiv. How much potential profit does the group lose as aDisamostoresult of Pierre's cheating?01511Dc. Suppose that Gaston, fed up with Pierre's behavior,also begins baking one extra soufflé each morning.Halogo.com si. How does the extra production affect the price ofsoufflés in the marketplace?100tre anonomii. Calculate Gaston's profit. How much did he gainby cheating?THEiii.Calculate Pierre's profit. How much did Gaston'scheating cost him?iv.How much potential profit does the group lose as aresult of Pierre's and Gaston's cheating?Demonstrate that it is in neither Pierre's norGaston's best interest to cheat further on theirvode el agreement.es

Note: “Since you have posted multiple questions with multiple sub-parts, we will provide the…

. Because cooking soufflés is incredibly difficult, the supply of soufflés in a small French town is controlled by two bak- ers, Gaston and Pierre. The demand for soufflés is given by P=30-20, and the marginal and average total cost of producing soufflés is $6. Because baking a soufflé requires a great deal of work and preparation, each morning Gastor and Pierre make a binding decision about how many souf- flés to bake. a. Suppose that Pierre and Gaston agree to collude evenly splitting the output a monopolist would make and charging the monopoly price. i. Derive the equation for the monopolist's margina revenue curve.

. Because cooking soufflés is incredibly difficult, the supply of soufflés in a small French town is controlled by two bak- ers, Gaston and Pierre. The demand for soufflés is given by P=30-20, and the marginal and average total cost of producing soufflés is $6. Because baking a soufflé requires a great deal of work and preparation, each morning Gastor and Pierre make a binding decision about how many souf- flés to bake. a. Suppose that Pierre and Gaston agree to collude evenly splitting the output a monopolist would make and charging the monopoly price. i. Derive the equation for the monopolist's margina revenue curve.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

3. Profit maximization using total cost and total revenue curves Suppose Bob runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $25 per teddy bear. The following graph shows Bob's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Bob produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 50 25 0 -25 O ☐ ☐ 0 1 2 3 4 5 QUANTITY (Teddy bears) ☐ 6 Total Cost 7 8 O Total Revenue Profit ?
Hello, this is a microeconomics question. Please use a drawing of a relevant graph to explain how does perfect competition ensure allocative efficiency? Not sure if I'm supposed to use this graph, but if i am please use it as reference when making your explantion to the question of how does perfect competition ensure allocative efficiency
Discuss economies of scale and how average cost changes as output increases. What pricing strategy should a firm adopt while they are experiencing economies of scale? 250 words please
Please solve in 20 minute
A person has the choice of running hot snack stall or an ice cream and cool drink shop at a certain holiday resort during the coming summer season. If the weather during the season is cool and rainy he can expect to make a profit of dollar 15,000 and if it is warm he can expect to make a profit of only dollar 3,000 by running a hot snack stall. On the other hand, if his choice is to run an ice cream and cool drink shop, he can expect to make a profit of dollar 18,000 if the weather is warm and only dollar 3,000 if the weather is cool and rainy. The meteorological authorities predict that there is 40% chance of the weather being warm during the coming season. You are to advise him as to the choice between the two types of stalls. Base clearly your argument on the expectation of the result of the two courses of action and show the result in a tabular form?
What is an example of another business that stays open even when it's slow, and its revenue does not seem like it could cover its costs? Use microeconomics terms to explain
Show what happens in the short run on both graphs when a new medical study shows soybeans to be highly carcinogenic. On the market graph, you will shift a curve or curves. On the firm's graph, use Price 2 to draw a new price line for the firm. On both graphs, indicate the new equilibrium point with point B. Now, show the changes that get both graphs back to long‑run equilibrium. Use shift(s) for the market and Price 3 for the firm. Indicate the new long‑run equilibrium with point C.
3
Say the market demand coming from consumers is P = 40 - Q. Say firm 1 has total cost TC1 = Q1+ Q1^2, where Q1 is the Q for firm one, and similarly for firm 2 TC2 = 4Q2 + 0.5Q2^2. In each scenario below show your work and say what is total Q in market market price the Q of each firm and the profit of each firm: The scenarios are the firms compete as if in perfect competition the firms form a cartel the firms act as Cournot Duopolists.
Help solving the table
Explain the gains from trade that arise for both buyers and sellers in the following transactions: a. Neighbors Jordan and Chelsea are both working parents. They are able to hire a single babysitter to care for both of their toddlers for 75% of what they would collectively have to pay two separate babysitters. b. Elijah decides that his family should eat more healthy meals, but they are short on time. He buys a subscription that sends healthy preplanned meals to his home three times a week. c. Callie accepts an extra shift at work and hires a cleaning service to clean her apartment.
Attempts: Average: 12 5. Profit maximization and shutting down in the short run Suppose that the market for sports watches is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. V ATC AVC PRICE (Dolars per watch) 100 5 MO 0 0 10 20 30 40 50 60 70 80 90 100 QUANTITY(Thousands of watches) For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the previous graph to see precise information on average variable cost.) Price Quantity (Dollars per watch) (Watches) 25.00 40.00 65.00 Total Revenue Fixed Cost Variable Cost (Dollars) (Dollars) (Dollars) 520,000 $20,000 520,000 (Dollars) If the firm shuts down,…