Moe Green estimates the cost of future projects for a large contracting firm. Mr. Green uses precisely the same techniques to estimate the costs of every potential job, and formulates bids by adding a standard profit markup. For some companies to whom the firm offers its services, no competitors exist, so they are almost certain to get them as clients. For these jobs, Mr. Green finds that his cost estimates are right, on average. For jobs where competitors are also vying for the business, Mr. Green finds that they almost always end up costing more than he estimates. Why does this occur?

The Jones are small farmers in the wheat industry – they are price takers.  Their cost function is:  TC = 600,000 + 3,000Q + Q2 and MC = 3,000 + 2Q.  The market price is $5,000 per ton. Assuming the Jones are maximizing profits (or minimizing loses), how much profit are they making? You must show your work.

AmonopolysellsitsproductinboththeU.S.andJapanese markets. The American inverse demand function is PUS = 100 – QUS, and the Japanese inverse demand function is PJ = 80 – QJ. PUS and PJ are both measured in dollars. The firm’s marginal cost is MC = 20 in both countries. Suppose the company can prevent resales between these two countries. In order to maximize its profit, what prices should the monopoly firm charge in the two markets?

You manage a company that competes in an industry that is comprised of 3 equal-sized firms that produce similar products. A recent industry report indicates that the market is fairly saturated, in that a 10 percent industry-wide price increase would lead to a 22 percent decline in units sold by all firms in the industry. Currently, Congress is considering legislation that would impose a tariff on a key input used by the industry. Your best estimate is that, if the legislation passes, your marginal cost will increase by 1 dollar. Based on this information, what price increase would you recommend if the tariff legislation is passed by Congress? Instructions: Enter your response rounded to the nearest penny (two decimal places).

Suppose that a factory that enjoys a monopoly in their market has one of their senior engineers retire. Losing this engineer caused the marginal and average total costs to increase by $20. As a result of this rise in costs, the factory changes its price to continue to maximize profit. We should expect production to: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a increase. b decrease. not change.

Problem 2: Presently, APlus Transport and Big Movers are the only suppliers of services that haul heavy construction equipment between jobs within the Midwest. No other suppliers have the equipment necessary to perform the service. The market inverse demand for these hauling services is given below. P = 4,030-4Q where P is price per trip and Q is total number of trips per year. For simplicity, also assume that neither firm has fixed costs. From company records, you are given the following variable cost function for each firm: a. C. TVC = 300 TVCB = 80QB b. Calculate the Cournot market equilibrium price-output solutions for each firm including their respective profits. d. Assume these two competitors operate as a two-firm Cournot duopoly. Find the reaction functions for each firm. Suppose Big Movers shuts down operations so that APlus now has a monopoly in this market. What is the price, quantity, and profits for APlus after this change? Summarize the results of your findings over the…