Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 28, Problem 3E
To determine
To explain:
Whether the terminating dealership is an act of pro − or anti-competitive manner.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please solve it quickly you can upload handwritten answer also.
Consider Atlanta as an oligopoly market with five airlines that behave in a Cournot Model fashion. The Atlanta market demand schedule is: P = 390 - .5*Q. The Cost schedule for Delta is: MC=AC=Scomp=80. The Cost schedule for the other four firms (United, Southwest, et al) is: MC=AC=Scomp=40. What is Delta’s new market share?
Apple faces competition from many other firms in the world market for mobile phones; therefore, Apple cannot have market power. Do you agree with this statement?
Predatory pricing occurs when a firm intentionally prevents competition by pricing their product at?
Knowledge Booster
Similar questions
- The daily demand for bungee jumping over a river in South Africa is given by Q=5000-200P. There are two firms operating and the first one has a daily capacity of 600 people and the second one of 400 people. The marginal cost of operation is 5 for both firms. The two firms compete in prices and announce their prices simultaneously. Calculate the price and profits of both firms.arrow_forward1) A monopoly faces a demand curve P(Q) = 120 – 2Q, and has a marginal cost of 60. a. What is profit-maximizing level of output? What is the profit-maximizing price? How much profit the firm will make? b. Assume that a second firm enters the market. The new firm has an identical cost function. If the two firms enter in a Cournot competition, what will be the price in equilibrium? How much will each firm produce in equilibrium? How much profit will each firm make? c. If, instead, the two firms compete in a Stackelberg game (assume the incumbent firm is the leader), what will be the price in equilibrium? How much each firm will produce in equilibrium? How much profit will each firm make? d. Now assume the follower has to pay a fixed cost, f =100 if q>0. Does it change the follower's decision? Assume again they are playing a Stackelberg game.? e. The leader knows that the follower has to pay the fixed cost and decides produce one third more than the quantity found in part c). Does it…arrow_forwardAssume that the competition between Boeing and Airbus can be characterized by the following matrix Airbus Produce Quit Boeing Produce 5/15 0/110 90/0 0/0 Quit where the first number in each cell denotes the payoff that Boeing receives and the second number is the payoff that Airbus receives. Then you would expect both Boeing and Airbus to produce Boeing to leave the market and Airbus to keep producing Airbus to leave the market and Boeing to keep producing that there will be no stable equilibriumarrow_forward
- Using the IRAC rule,please answer and discuss the question. John entered into a contract for the sale of his restaurant to Catherine. One of the terms of the contract was that Catherine would not open up a similar business within 20 miles of the location of the restaurant being sold. About a month after the sale John noticed a spanking new restaurants two blocks down the road from his recently purchased business. When he found out that the proprietor of the new restaurant was Catherine, he sued for breach of contract. Explain the likely outcome based on the laws governing legality.arrow_forwardConsider a duopoly market with volume competition. The demand is given by P = 120-Q. P is the price and Q is the quantity. The total costs of company 1 are TK1 = 45Q1 and the total cost of Company 2 is also TK2 = 45Q2 Do you calculate the amount provided by company 1 for this type of market? Answer:arrow_forwardIn the mobile phone market, Samsung and Apple constitute a duopoly in the production of devices.The American firm has the following demand q_a = 10 - p_a + 0.25p_s, and the Korean firm, q_s = 20 -p_s+ 0.5p_a. Because both firms assembly their devices in China, their cost structure is the same andequal to ?(q) = 10q, answer the following questions.a) What would be the equilibrium (quantity, price, and profit) in this market, and interpret youranswer.b) If they decide to form a cartel, what are the new quantities, prices, and profits?arrow_forward
- Type out the correct answer ASAP with proper explanation of it within 40 50 minutes.will give you thumbs up only for the correct answer. Thank you Inverse market demand is: P = 1,000 - (Q1+ Q2). Costs for each firm are identical and given by: Ci(Qi) = 4Qi The profit earned by the leader in a Stackelberg oligopoly equals $ What is Q1? What is Q2? What is Pricearrow_forwardThere are two firms competing in the market for Airplanes - Boeing (B) and Airbus (A). The market demand is given by Q = 120 - p. Their marginal cost are as follows: MCB = $20, MCA = $40. (Think of price being in millions.) How many airplanes did Boeing sell in this Airplane (please put your answer in numerical values with no comma or decimal place). How many airplanes did Airbus sell in this Airplane market? (please put your answer in numerical values with no comma or decimal place). What is the total quantities of airplanes sold in the market? (please put your market? answer in numerical values with no comma or decimal place) What is the equilibrium price in millions? million (please put your answer in numerical values with no dollar sign, comma or decimal place). What is Boeing's profit in millions? million (please put your answer in numerical values with no dollar sign, comma or decimal place). What million (please put your answer in numerical values with no dollar (please put is…arrow_forwardExplain in what sense historical accidents can play an important role in establishing a center (or a cluster) of an industry when the industry is strongly influenced by external economy in a monopolistic competition.arrow_forward
- QUESTION 9 After a complex process of mergers and acquisitions, the technology company Globocorp Enterprises has acquired control of all the world's sigmantium (which is a semi-conductor that is essential to manufacture mobile phones). As a result of its control of international sigmantium production, Globocorp Enterprises is now the world's only supplier of mobiles and it therefore operates as a profit maximising monopolist in this market. Their marginal cost of production for each mobile is $160 per phone. Below is a table of prices Globocorp can charge for each mobile that it produces, and the corresponding quantities sold on any given day. Price ($/mobile phone) 400 380 360 340 320 300. Quantity (mobile phones) 45000 50000 55000 60000 65000 70000 What is Globocorp Enterprises' daily revenue at the profit maximising level of production? Answer to the nearest whole number (with no decimal places or $ sign), and only use the options in the table above.arrow_forwardIn the industry structure there are no barriers to entry for new firms.arrow_forwardSuppose that econometricians at Hallmark Cards determine that the price elasticity of demand for greeting cards is -2. a. If Hallmark's marginal cost of producing cards is constant and equal to $1.00, use the Lerner index to determine what price Hallmark should charge to maximize profit. b. Hallmark hires you to estimate the price elasticity of demand faced by its archrival, American Greetings. Hallmark estimates that American's marginal cost of producing a greeting card is $1.22. You note that American's cards sell for an average of $3.25. Assuming that American Greetings is maximizing profit, calculate their price elasticity of demand.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning