Explain why the following statement is false. Consider an imperfect market with a few firms. By forming the best strategy to compete with each’s rivals, the firms in the market

Explain in few lines Three firms are competing through prices (Bertrand competition). They are all selling the same products. The only difference is that the first two firms have a constant marginal cost equal to 2 while the third firm has a constant marginal cost equal to 5. In equilibrium the two firms with lower marginal cost will set their price just slightly below 5

Firms in an oligopoly do not choose to compete in price. Which model is used to explain nonprice competition? Draw a graph and explain briefly.

There are two firms competing in the market for Airplanes - Boeing (B) and Airbus (A). The market demand is given by Q = 120 - p. Their marginal cost are as follows: MCB = $20, MCA = $40. (Think of price being in millions.) How many airplanes did Boeing sell in this Airplane (please put your answer in numerical values with no comma or decimal place). How many airplanes did Airbus sell in this Airplane market? (please put your answer in numerical values with no comma or decimal place). What is the total quantities of airplanes sold in the market? (please put your market? answer in numerical values with no comma or decimal place) What is the equilibrium price in millions? million (please put your answer in numerical values with no dollar sign, comma or decimal place). What is Boeing's profit in millions? million (please put your answer in numerical values with no dollar sign, comma or decimal place). What million (please put your answer in numerical values with no dollar (please put is…

True or false: In a perfectly competetive market, when AVP<P<ATC, a firm will not produce any output to minimize its costs. Explain why using a graph.

The following integrated series of questions relates to several sections in the text. Scenario 2: Suppose a stream is discovered whose water has remarkable healing powers. You decide to bottle the liquid and sell it. The market demand curve is linear and is given as follows: P = 30 -Q The marginal cost to produce this new drink is $3. Refer to Scenario 2. What will be the price of this new drink in the long run if the industry is a Cournot duopoly? A. $3 В. $9 C. $13.50 D. $12 E. None of the above

*You only need to answer question D*

Suppose Eckerd Pharmacy is the only pharmacy in a particular market, but CVS Pharmacy is thinking about entering the market. Absent entry, Eckerd Pharmacy can maximize profits by producing a small quantity. However, by producing a large quantity, Eckerd Pharmacy can attempt to deter entry by reducing prices and, consequently, profits. Eckerd Pharmacy must choose how much to produce first and then CVS Pharmacy will choose whether to enter the industry. The strategies and corresponding profits for Eckerd (E) and CVS Pharmacy (C) are depicted in the decision tree to the right. What is the Nash equilibrium of the game? OA Eckerd Pharmacy will choose the small quantity and CVS Pharmacy will not enter OB. Eckerd Pharmacy will choose the large quantity and CVS Pharmacy will enter. C. Eckerd Pharmacy will choose the large quantity and CVS Pharmacy will not enter. OD. Eckerd Pharmacy will choose the small quantity and CVS Pharmacy will enter Small Quantity, Large Quantity U Enter Stay Out Enter…

A group of firms explicitly colluding to make price and output decisions is called a )     price leadership. b )     a cartel. c )     a concentrated industry. d )     an oligopoly.

Suppose that Raleigh and Dawes are the only sellers of bicycles in the UK. The inverse market demand function for bicycles is P(Y)=200-2Y. Both firms have the same total cost function: TC(Y)=12Y and the same marginal cost: MC(Y)=12. Suppose this market is a Stackelberg oligopoly, and Raleigh is the first mover. Write down a formula for the reaction function of Dawes. Calculate the equilibrium quantity that each firm produces and the equilibrium price in the market. Give typing answer with explanation and conclusion