Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 13, Problem 2P
To determine
How monopolistic competition differs from pure competition.
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Question 2 [JP.14.3.19]
Consider a duopoly where the market demand is described by the equation: P = 150- Q. The marginal
cost for each firm is $60.
lo.] If the firms compete simultaneously with output, what is each firm's profit-maximizing output, the market
quantity, and the price each firm charges?
(b.) What is the economic profit eamed by each firm (from question [a]}
[c.) If Firm 1 is a leader in output, what is each firm's profit-maximizing output, the market quantity, and the
price each firm charges?
[d.] What is the economic profit earned by each firm (from question [c])?
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QUESTION 23
Suppese an indstry has utal sales f 25 millon per y The teo larpest fems have sales of $6 millen each the id largest fem has sales of 2 miion, and the fourth largest f has sales of S1 millon The
rm conceation ratio for thin nduty
O 30 percent
O 1 percent
O25 percent
O 60 percent
QUESTION 24
Suppose there are four frm in an industry The market shares of the four fems are 5 percent, 20 percent 35 percert, and 40 percent The Hurfindahi Hischan index tor that industry
O 100
O6 650
O 1.250
O 3250
Chck Sane and Sulmit to ae and aulimit. Click Sate All Anaue to se all aencers
Sa A
Suppose there are two firms in an industry and the inverse demand function for the industry is:
P = 45 - 20
Assume that the MC functions for the two firms are:
MC1 = 15
MC2 = 12
What is the price under Courbet model?
O 15
O 24
O 30
O 36
O 21
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