Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 10, Problem 16SQ
To determine
The equilibrium in the market with a cartel.
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The graph below shows the demand for Cosmic shampoo.
Suppose there are no fixed costs and marginal cost is a constant $80.a. What are the perfectly competitive price and output?
Price: $
Output:
b. What are the cartel (monopoly) price and output? Price: $
Output:
c. If there are only four firms in the cartel, what are the price and output of each firm, assuming equal shares? Round your answers to 1 decimal place. Price: $
Output:
The table shows the demand schedule for a particular product.
Quantity
Price
0
100
300
90
600
80
900
70
1200
60
1500
50
1800
40
2100
30
2400
20
2700
10
3000
0
Suppose the market for this product is served by two firms who have formed a cartel and are colluding to set the price and quantity in this market. If the marginal cost to produce this product is constant at $40 per unit, then what price will the cartel set in this market?
a. $40 b. $50 c. $60 d. $70 e. $80
Consider the curve in Figure, which shows the market demand, marginal cost, and marginal revenue curve for firms in an oligopolistic industry. In this example, we assume firms have zero fixed costs. a. Suppose the firms collude to form a cartel. What price will the cartel charge? What quantity will the carte supply? How much profit will the cartel earn? b. Suppose now that the cartel breaks up and the oligopolistic firms compete as vigorously as possible by cutting the price and increasing sales. What will be the industry quantity and price? What will be the collective profits of all firms in the industry? c. Compare the equilibrium price, quantity, and profit for the cartel and cutthroat competition outcomes.
Chapter 10 Solutions
Micro Economics For Today
Ch. 10.1 - Prob. 1YTECh. 10.5 - Prob. 1GECh. 10.6 - Prob. 1YTECh. 10 - Prob. 1SQPCh. 10 - Prob. 2SQPCh. 10 - Prob. 3SQPCh. 10 - Prob. 4SQPCh. 10 - Prob. 5SQPCh. 10 - Prob. 6SQPCh. 10 - Prob. 7SQP
Ch. 10 - Prob. 8SQPCh. 10 - Prob. 9SQPCh. 10 - Prob. 10SQPCh. 10 - Prob. 11SQPCh. 10 - Prob. 12SQPCh. 10 - Prob. 13SQPCh. 10 - Prob. 1SQCh. 10 - Prob. 2SQCh. 10 - Prob. 3SQCh. 10 - Prob. 4SQCh. 10 - Prob. 5SQCh. 10 - Prob. 6SQCh. 10 - Prob. 7SQCh. 10 - Prob. 8SQCh. 10 - Prob. 9SQCh. 10 - An oligopoly is a market structure in which a. one...Ch. 10 - Prob. 11SQCh. 10 - A common characteristic of oligopolies is a....Ch. 10 - Prob. 13SQCh. 10 - Prob. 14SQCh. 10 - Prob. 15SQCh. 10 - Prob. 16SQCh. 10 - Prob. 17SQCh. 10 - Prob. 18SQCh. 10 - Prob. 19SQCh. 10 - The kinked oligopoly demand curve is a result of...
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