Q: look at the influence of mileage on the sale price of each brand ofautomobile. Postulate the…
A: The objective of the question is to understand the influence of mileage on the sale price of two…
Q: Assume a model with no foreign trade, and tax equals O, the consumption function is defined as C =…
A: marginal propensity to Consume (MPC) is the change in consumption due to $1 change in disposable…
Q: From the 1960s to 2020, transfer payments A. have declined by half as a percentage of total…
A: Transfer payments refer to payments made by a government to individuals, groups or other governments…
Q: Suppose that the MPC is .75 and the MPM is .1. What is the size of the multiplier?
A: MPC refers to Marginal Propensity to Consume. It is the proportion of the additional income which…
Q: The accompanying figure shows the demand curve, marginal revenue curve, marginal cost curve, and…
A: The markets are the place where the purchasers of goods and services tend to work with the motive of…
Q: Which of the following is a characteristic of perfectly competitive markets? OA. There will be no…
A: A market with perfect competition, implies there are no barriers to entry. Presence of buyers and…
Q: Consider the graph below. Should this firm stay open or shut down in the short run and why? ATC* P*…
A: Shut down point:- A shutdown point can be explained as a phase in production activities where a…
Q: Assume the management of two large firms selling canned vegetables hold a secret meeting to create a…
A: Collusion refers to a secretive or illegal agreement or cooperation between two or more parties,…
Q: An underground aquifer in a developing country is available to all farms in a small community. It…
A: Externalities are important in economics because they indicate the unintended consequences of…
Q: The graphs in the figure below represent the perfectly competitive market demand and supply curves…
A: The perfectly competitive market refers to market where all firms are price-takers and single firm…
Q: The market demand curve for a pair of duopolists is given as P = 21 − 2Q, where Q = Q1 + Q2. The…
A: Market demand curve: . ..... (1)There are two firms, each firm has a constant marginal cost…
Q: A multinational security software company is planning an overseas expansion that will cost $47.00…
A: Annual deposit means the amount of money deposited into an account or invested over a year. It could…
Q: Clinix is considering four independent projects. Given: All the projects will be economically…
A: There are four independent projects: project A, project B, project C, and Project D. Each project…
Q: A Startup is considering buying a $300,000 prece the it purchases of equipment. If equipment, to…
A: Present Worth (also known as Present Value or Net Present Value) is a financial concept used in the…
Q: An industrial firm makes two products, A and B. These products require water resources where they…
A: Total revenue in economics refers to the overall income or sales generated by a firm through the…
Q: Which was a consequence of the US ending the post-World War II quasi-gold standard in the early…
A: The question is asking about the consequences of the US decision to end the quasi-gold standard in…
Q: Based on these answers, should James continue operating the company?
A: Economic profit (or loss) implies the difference between the total revenues, minus costs, and the…
Q: Question 3: Consider the two-period model. The consumer has an asset, which is worth 4 in the…
A: The consumer's budget constraint is a representation of the combinations of goods and services that…
Q: The above diagram shows a market for a popular soft drink and how a tax will impact the market.…
A: Producer surplus is the difference between the minimum price a producer is willing to accept for…
Q: As per the table, which country is forecasted to have the strongest total economic growth? B A C STU…
A: Gross Domestic Product refers to the total of goods and services that are produced in any economy.…
Q: In country Macroland, the government borrows at 5% for 1-year maturity. However, the Central Bank…
A: The rate at which government borrows is 5% that matures in 1 year. In this situation, the central…
Q: 42. Your insured decides to install a recreation room in the basement of the house. Which one (1)…
A: A Homeowners Comprehensive Policy, also known as an HO3 policy is a type of homeowners insurance…
Q: The borrower's financial ability to meet credit obligations is called: O Capital. O Capacity. O…
A: Financial market:It is a market where there is buying and selling of financial securities. It…
Q: 13. At what price the competitive firm is making a zero profit? Price and cost MC ATC AVC с
A: Perfect competition is an idealized economic concept that describes a market structure with the…
Q: New technology created by a private sector company leads to: a. private benefits b. social…
A: The term "private benefit" describes the unique benefits, profits, or advantages that come to a…
Q: Consider a duopoly where firms sell an homogeneous product and compete in price (Bertrand…
A: Duopoly in economics is a market situation in which there are only two dominant firms that dominate…
Q: Why do economists seek to abstract from the business cycle to focus on long-term secular trends in…
A: The business cycle is the phenomenon of ups and downs in an economy. The business cycle has periods…
Q: The American colonies/states had a legislative-dominant theory of government because they had a long…
A: The ability of a community or political body to govern itself through representative organizations…
Q: 3) What are some of the issues associated with the consumer price index?
A: The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket…
Q: At which point in Figure 9-7 would a perfectly competitive firm earn a positive economic profit? OA…
A: A competitive firm operates in a market with many buyers and sellers, offering identical products,…
Q: How is food justice related to environmental justice?
A: Food justice encompasses the pursuit of inclusive food systems that prioritize fairness, respect and…
Q: The State of Chiapas, Mexico, decided to fund a program for improving reading skills in elementary…
A: The perpetual equivalent annual cost (PEAC) is a financial concept used in capital budgeting and…
Q: In the most recent trade round of the World Trade Organization (WTO), the Doha Round, negotiations…
A: The objective of the question is to verify the accuracy of a statement regarding the reasons for the…
Q: pose Joe and Jill are the only two people in the small town of Andover. Andover has land available…
A: MSB is the total benefit received by society as a whole for producing each additional unit of the…
Q: Please don't provide handwritten solution.... In May 1991, Car and Driver described a Jaguar…
A: Demand refers to the willingness to pay by consumers for a good or service in the market for the…
Q: If a German firm's cost of goods sold in UK is much greater than its sales in UK, the appreciation…
A: Foreign exchange risk, also known as currency risk, in economics is defined as the risk that arises…
Q: This graph shows the cost and revenue curves faced by a monopoly. Which of the following statements…
A: Monopoly:Monopoly is a market where there is one seller and many buyers. Seller sells the product at…
Q: There are two goods x and y. A consumer has utility function U(x, y) = min(2x, y). The price of good…
A: A utility function in economics represents a mathematical expression that quantifies an individual's…
Q: The figure below shows the costs of Quick Copy, one of many copy shops near campus. If the market…
A: In the production process, the conditions and fluctuations that happen between demand and also the…
Q: Figure 4-16 ↑price S S quantity Refer to Figure 4-16. If the supply curves that are drawn represent…
A: The amount of goods and services that sellers are ready to sell at the given prices during a certain…
Q: The President of ALS Society of America asks you to determine whether the level of ALS research in…
A: We have been given the inverse demand equation for Mother Teresas and Scrooges:Mother Teresa's…
Q: I need help on D through H! Please! Suppose the reserve requirement is 8% and a new deposit of $900…
A: The central banking system of the United States is called the Federal Reserve. This is otherwise…
Q: For Question 13, consider a game in which the "Best Response Arrows" are as illustrated below.…
A: Nash equilibrium:It is a concept of economics, which suggests that individuals are in a state of…
Q: Mr Usu has an expected utility function with u(x) = x0.5. He is analyzing an investment opportunity…
A: Expected utility is the expected amount of utility or satisfaction an individual, organisation or…
Q: Please write down only the answers. Attachment screenshot is for your reference as well. 1. Income…
A: The poverty line is the line defined by the government of the nation, under which an individual is…
Q: Using the aggregate demand-aggregate supply diagram, graphically illustrate and e
A: The monetary policy refers to policy concerning the cost and availability of credit in the economy.…
Q: ProPainters hires students at $250 a week to paint houses. It leases equipment at $500 a week. The…
A: Cost can be defined as a concept that shows the amount of expenditure and any other sacrifice such…
Q: Please match the five forces that sh Firms must buy the inputs for a good. 0 pot ********* Div ca…
A: The factors that influence industry rivalry and profitability play a critical role in determining…
Q: Question 2: Consider a consumer who lives for two periods. The consumer's current- period income is…
A: There are two periods - Current & Future For current period -Consumption = c Income = y For…
Q: 9) Using the foreign exchange market diagram, graphically illustrate and explain the impact of U.S.…
A: Every country engages in trade with other countries to increase the foreign currency reserves. The…
Let ci be the constant marginal and average cost for firm i (so that firms may have different marginal costs). Suppose demand is given by P=1-Q.
-
Calculate the Nash
equilibrium quantities assuming there are two firms in a Cournot market. Also compute market output, market price, firm profits, industry prof- its,consumer surplus , and total welfare. -
Represent the Nash equilibrium on a best-response function diagram. Show how a reduction in firm 1’s cost would change the equilibrium. Draw a representative isoprofit for firm 1.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 52 images
- 1. The market (inverse) demand function for a homogeneous good is P(Q) = 10 - Q. There are two firms: firm 1 has a constant marginal cost of 2 for producing each unit of the good, and firm 2 has a constant marginal cost of 1. The two firms compete by setting their quantities of production, and the price of the good is determined by the market demand function given the total quantity. a. Calculate the Nash equilibrium in this game and the corresponding market price when firms simultaneously choose quantities. b. Now suppose firml moves earlier than firm 2 and firm 2 observes firm 1 quantity choice before choosing its quantity find optimal choices of firm 1 and firm 2.The market demand function is Each firm has a marginal cost of m = $0.28. Firm 1, the leader, acts before Firm 2, the follower. Solve for the Stackelberg-Nash equilibrium quantities, prices, and profits. The Stackelberg-Nash equilibrium quantities are The Stackelberg-Nash equilibrium price is Profits for the firms are and 92 p = $ π2 $ = Q=7,000 1,000p. 91 and units units. (Enter your responses as whole numbers.) (Enter your response rounded to two decimal places.) π₁ = $ (Enter your responses rounded to two decimal places.)QUESTION 10 Suppose there are two firms that produce an identical product. The demand curve for the product is given by P = 62 - Q where Q is the total quantity produced by the two firms. Both firms choose their individual quantities qı20 and q22 0 simultaneously. Each firm has a marginal cost of 37. What is the market price when both firms produce the quantities in the unique Nash equilibrium? Give your answer as a number to two decimal places.
- 10Two firms produce differentiated products. The demand for each firm’s product is as follows: Demand for Firm 1: q1 = 20 – 2p1 + p2 Demand for Firm 2: q2 = 20 – 2p2 + p1 Both firms have the same cost function: c(q) = 5q. Firms compete by simultaneously and independently choosing their prices and then supplying enough to meet the demand they receive. Please compute the Nash equilibrium prices for these firms.Three firms compete in the style of Cournot. The inverse demand is P(Q) = a - Q. Scenario 1: All three firms have the same constant marginal cost MC = c. Scenario 2: Firm 1 has MC = 0.5c, Firm 2 has MC = c, and Firm 3 has MC = 1.5c. Assume that a > 3c. Which of the following is correct? (Price means the price in Nash equilibrium.) O Price in scenario 1> Price in scenario 2 O Price in scenario 2> Price in scenario 1 O Price in scenario 1 = Price in scenario 2 O Any of the first three options is possible depending on the value of a O Any of the first three options is possible depending on the value of a and c.Consider two firms that produce the same good and competesetting quantities. The firms face a linear demand curve given by P(Q) =1 − Q, where the Q is the total quantity offered by the firms. The costfunction for each of the firms is c(qi) = cqi, where 0 < c < 1 and qiis the quantity offered by the firm i = 1, 2. Find the Nash equilibriumoutput choices of the firms, as well as the total output and the price, andcalculate the output and the welfare loss compared to the competitiveoutcome. How would the answer change if the firms compete settingprices? What can we conclude about the relationship between competitionand the number of firms?
- Assume firms' marginal and average costs are constant and equal to c and that inverse market demand is given by P = a - bQ where a, b > 0. Suppose now the market is served by k firms that choose quantities for their identical products simultaneously. Calculate: i. ii. iii. iv. The Nash equilibrium quantities for the Cournot firms as functions of k. 2 Market output and price as a function of k Firm profit as a function of k Using your answers in i, ii, iii and iv, describe what happen to firm output, market output, market price and firm profit as the number of firms increases.2) Suppose the Market Demand function is Q = 60,700 – 520P. The two firms in the market compete under Bertrand Competition. The Marginal Cost (MC) for the two firms is MC = $39.90. What is the market price at the Nash Equilibrium?Assume a Nash-Cournot equilibrium. How much output does firm 1 produce? Assume a Nash-Cournot equilibrium and no fixed cost. How much profit does firm 2 make? Now assume a collusive equilibrium. What is firm 1's output?
- The market demand function is Q=10,000-1,000p. Each firm has a marginal cost of m=$0.28. Firm 1, the leader, acts before Firm 2, the follower. Solve for the Stackelberg-Nash equilibrium quantities, prices, and profits. Compare your solution to the Cournot-Nash equilibrium. The Stackelberg-Nash equilibrium quantities are: q1=___________ units and q2=____________units The Stackelberg-Nash equilibrium price is: p=$_____________ Profits for the firms are profit1=$_______________ and profit2=$_______________ The Cournot-Nash equilibrium quantities are: q1=______________units and q2=______________units The Cournot-Nash equilibrium price is: p=$______________ Profits for the firms are profit1=$_____________ and profit2=$_______________. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell tablets: Padmania and Capturesque. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its tablets. Capturesque Pricing High Low Padmania Pricing High 9, 9 3, 15 Low 15, 3 7, 7 For example, the lower-left cell shows that if Padmania prices low and Capturesque prices high, Padmania will earn a profit of $15 million, and Capturesque will earn a profit of $3 million. Assume this is a simultaneous game and that Padmania and Capturesque are both profit-maximizing firms. If Padmania prices high, Capturesque will make more profit if it chooses a price, and if Padmania prices low, Capturesque will make more profit if it chooses a price. If Capturesque prices high, Padmania will make more profit if it chooses a price, and if Capturesque prices low, Padmania…Economics Bidding for Bookstore Licenses. Paige initially has the only license to operate a bookstore in Bookville. She charges a price of $13 per book, has an average cost of $3 per book, and sells 1,501 books per year. When Paige's license expires, the city decides to auction two bookstore licenses to the highest bidders. Suppose the relevant variables (price, average cost, and output per firm) take on only integer valueslong dash—no fraction or decimals. a. Suppose Paige is optimistic and imagines the best possible outcome with a two-firm market. What is the maximum amount she is willing to pay for one of the two licenses? $ nothing (Hint: How will the relevant variables change? What is the smallest possible change in their values?) b. Suppose Paige is pessimistic and imagines the worst possible outcome with a two-firm market. What is the maximum amount she is willing to pay for one of the two licenses? $ nothing (Enter your response as an integer.)