In the international aircraft industry, suppose there is a dominant domestic firm and a competitive foreign fringe. At a price below $3 million, the foreign fringe cannot compete. At prices above $10 million, the fringe will take over the market. Diagram this market with an international price of $7 million. Show the effects on market shares of an increase in domestic costs resulting from a new labor contract.
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In the international aircraft industry, suppose there is a dominant domestic firm and a competitive foreign fringe. At a price below $3 million, the foreign fringe cannot compete. At prices above $10 million, the fringe will take over the market. Diagram this market with an international price of $7 million. Show the effects on market shares of an increase in domestic costs resulting from a new labor contract.
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- Consider a single country and a single good. The demand curve for this good is given by QD = 144 - 4P. Thereare two firms serving the market: Firm A and Firm B, where Firm A has a marginal cost of $20 and Firm B hasa marginal cost of $16. There are no fixed costs incurred by either firm. Assume that these firms compete in Bertrand fashion. Part V. What is the equilibrium price in the market now? Explain your reasoning. Part VI. How many units of output each firm produces? Show your work. Part VII. How much profit each firm makes now? Show your work. Part VIII. What is the consumer surplus? Show your work. Part IX. Under which competition, Cournot vs. Bertrand, social welfare is higher? Show your work.Consider a single country and a single good. The demand curve for this good is given by QD = 144 - 4P. Thereare two firms serving the market: Firm A and Firm B, where Firm A has a marginal cost of $20 and Firm B hasa marginal cost of $16. There are no fixed costs incurred by either firm. Assume that these firms compete in Bertrand fashion. Part I. What is the equilibrium price in the market? Explain your reasoning. Part II. How many units of output each firm produces? Show your work. Part III. How much profit each firm makes? Show your work. Part IV. What is the consumer surplus? Show your work.Consider a single country and a single good. The demand curve for this good is given by QD = 144 - 4P. Thereare two firms serving the market: Firm A and Firm B, where Firm A has a marginal cost of $20 and Firm B hasa marginal cost of $16. There are no fixed costs incurred by either firm. Firm A produces 16 units and firm B produces 32 units. The equilibrium price is $24. Total Profit for Firm A = $64 Total Profit for Firm B = $256 Assume that these firms compete in Cournot fashion. What is the consumer surplus? Show your work.
- You have decided to open a coffee shop in San Bernardino. While there is a lot of competition (i.e. it's a perfectly competitive market) for coffee in the area, you have developed coffee making technology to sell coffees at $3 per coffee. If the minimum wage for coffee restaurant employees is $10 per hour, and you schedule employees for 8-hour shifts ($80 a day). How many employees should you hire? Employee 1 2 3 4 5 1 2 3 4 Total output (coffees per day) 40 74 102 124 140 Marginal Product 40 34 28 22 16 Marginal Revenue Product $120 $102 $84 $66 $48 Marginal V $80 $80 $80 $80 $80Suppose Ramone's Drones maximizes profits by making local deliveries using small drones and centrally located pilots to control the drones remotely. In the markets for pilots and drones, neither side has any market power - that is, they are both competitive markets. A) If drones cost Ramone $1000 each to hire, what is the marginal revenue product (MRPK) of drones? B)If pilots can be hired at a cost of $300 per day, what is the marginal revenue product (MRPL) of the pilots?Suppose the US is relatively well endowed with skilled workers and Mexico is relatively well endowed with unskilled workers. Define wg as the wage of a skilled worker and wy as the wage of an unskilled worker. The production of widgets is unskilled labor intensive and the production of gadgets is skilled labor intensive. Both factors of production are mobile across industries but immobile across countries. Assume perfect competition in both markets. In the U.S., the unskilled workers support the free trade policy because free trade is beneficial. False. True.
- Consider a country that produces computers (C) and food (F) using capital (K) and labor (L). Both industries are perfectly competitive. The factors of production are complements. As a result, unit factor requirements are fixed and given by: aKc = 3, aKF=1, aLc = 2 and aLF = 4. Suppose that this economy has 100 units of capital and 150 workers. (c) Suppose that the world price of computers is $16 and the world price of food is $12. Assume that the Home country produces both goods. What are the free trade factor price levels W and R? (d) How many computers and units of food will the economy produce? (e) Suppose that the endowment of labor increased to 200. Compute the new equilibrium wage, rental rates and quantities produced in the new equilibrium. Provide the intuition of your results.Consider two identical countries (H and F) with the same individual firm's inverse demand function: P₁ = A - Bq₁. Firms differ in their marginal costs, c. Firms in country I want to sell their products in Country F through export or horizontal FDI. Firms need to pay the unit trade cost t when exporting. If the firm chooses to undertake FDI, the firm needs to pay a fixed cost, F. (a) Solve the profit function for firms with marginal production costc, in the domestic market (7), export market (*) and the profit if undertaking FDI (7) in terms of A, B, t, F and c. (b) Based on our discussion in class, low - c firms are more likely to participate FDI. Solve the cutoff marginal cost for undertaking FDI. i 3 1. Consider two identical countries (H and F) with the same individual firm's inverse demand function: P = A - Bqi. Firms differ in their marginal costs, c₁. Firms in country H want to sell their products in Country F through export or horizontal FDI. Firms need to pay the unit trade…Only elves live inn Rivendell. Elves in Rivendell are expert jewelry makers. In the perfectly competitive market for jewelry in Rivendell, the demand and supply are given by QD = 10– 2P QS = 5P Jewelry made in Rivendell is also desired by humans who live in the world outside Rivendell. Jewelry can be sold to those humans in a perfectly competitive world market where Pw = 2. Jewelry can be traded within Rivendell and in the world outside. a) What will be the price at which trade of jewelry occurs? What quantity will be sold to elves in Rivendell and what quantity will be exported? b) Calculate the producer surplus and consumer surplus in Rivendell, and illustrate them in a demand and supply graph.
- Consider a single country and a single good. The demand curve for this good is given by QD = 144 - 4P. Thereare two firms serving the market: Firm A and Firm B, where Firm A has a marginal cost of $20 and Firm B hasa marginal cost of $16. There are no fixed costs incurred by either firm. Assume that these firms compete in Cournot fashion. Part I. How many units of output each firm produces? Show your work. Part II. What is the equilibrium price in the market? Show your work.Part III. How much profit each firm makes? Show your work. Part IV. What is the consumer surplus? Show your work.Consider that Ah Cy is a retail firm that produces and sells fashion accessories including crocheted bracelets. Ah Cy is one of many firms participating in a highly competitive national market for crocheted bracelets. The market price for crocheted bracelet is $18.20 and the market is in equilibrium. Firms in the market and potential entrants have the same cost structure, and the current market quantity is 48,280 bracelets. At Ah Cy, the cost of labor and materials used in production is described by the equations: MC = 4 + 0.05g and AVC = 4 + 0.025q. In addition to these costs, the firm faces a cost of $4,840 for its machinery and equipment. (NOT FOR SALE • DO NOT COPY) (Question 7 of 8) Now consider that higher input prices led to a decrease in the supply of leather bracelets, a substitute consumption good. In the market for leather bracelets, the market price, and quantity of leather bracelets traded changes, and this impacts the competitive market for crocheted bracelets. As a…You manage a company that competes in an industry that is comprised of five equal-sized firms. A recent industry report indicates that a tariff on foreign imports would boost industry profits by $30 million—and that it would only take $5 million in expenditures on (legal) lobbying activities to induce Congress to implement such a tariff.Discuss your strategy for improving your company’s profits.