3. Breakdown of a cartel agreementConsider a town in which only two residents, Daniel and Gabrielle, own wells that produce water safe for drinking. Daniel and Gabrielle can pump andsell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water.Price(Dollars per gallon)Quantity DemandedTotal Revenue(Gallons of water)(Dollars)4.20003.8540$154.003.5080$280.003.15120$378.002.80160$448.002.45200$490.002.10240$504.001.75280$490.001.40320$448.001.05360$378.000.70400$280.000.35440$154.0004800Suppose Daniel and Gabrielle form a cartel and behave as a monopolist. The profit-maximizing price is $output isper gallon, and the totalgallons. As part of their cartel agreement, Daniel and Gabrielle agree to split production equally. Therefore, Daniel's profit isand Gabrielle's profit is $

To fill in the blanks, we need to find the profit-maximizing price and the corresponding…

Answered: 3. Breakdown of a cartel agreement…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 1PA

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4. You have been hired as a consultant to estimate the demand for various brands ofcoffee in the market. You are provided with annual price data for two years by U.S.state and the quantities sold. You want to estimate a demand function for coffeeusing this data. What problems do you think you will encounter if you estimatedthe demand equation by OLS?
The chart below shows how annual electricity for an average Ontario household would vary with the price paid for electricity. Calculate the arc elasticity of demand for electricity for this average houschold. Also, in the final column, calculate the total revenue from sales of clectricity to this household. Price Quantity Demanded Kwh/year Total Revenue $/kwh Elasticity of Demand $0.25 1200 -0.36 $0.20 1300 $0.15 1400 $0.10 1500 $0.05 1600 Hint: The own price elasticity of demand is the percentage change in the quantity demanded divided by the percentage change in the price. What factors do you think influence the elasticity of demand for this household?
Typed answer please. ASAP. SOLVE CO
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1. TopGames buys the rights to sell a certain video game title worldwide. top games pay $400,000 for this right and the marginal cost of providing the video game download is zero. TopGames’ economist realizes they have two groups of customers: the 2,000 hard-core fans of this game who will pay up to $150 a year to be able to play this game; and the 10,000 casual gamers who will pay up to $50 a year to play this game. If TopGames can NOT price discriminate, what is its profit-maximizing price? What is its profit? a. Price = $50; Profit = negative $100,000 b. Price = $50; Profit = $300,000 c. Price = $150; Profit = $100,000 d. Price = $150; Profit = $500,0002. TopGames buys the rights to sell a certain video game title worldwide. top games pay $400,000 for this right and the marginal cost of providing the video game download is zero. TopGames’ economist realizes they have two groups of customers: the 2,000 hard-core fans of this game who will pay up to $150 a year to be able to play this…
Quantity (in gallons) Total Price Revenue $8 $0 50 7 350 100 600 150 750 200 4 800 250 3 750 300 600 350 1 350 400 Imagine a small town in a remote area where only two residents, Maria and Miguel, own dairies that produce milk. Their respective dairies are equal in size. Each week Maria and Miguel work together to decide how many gallons of milk to produce and what price to charge. To keep things simple, suppose that Maria and Miguel can produce as much milk as they want without cost so that the marginal cost is zero and there are no fixed costs. The weekly town demand schedule and total revenue schedule for milk is shown in the table above. Suppose the town enacts new antitrust laws that prohibit Maria and Miguel from operating as a cartel. Assuming that each producer can only modify quantity in increments of 50, which of the following is consistent with the Nash equilibrium for this scenario? Maria will charge a price of $5 for each gallon. Miguel will sell 100 gallons. Milk will…
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1. Rio live in a town with 300 adults and 200 children, and he is thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000 except all cost like maintenance costs until two years, but selling an extra ticket has zero marginal cost. Here are the demand schedules for his two types of customer: Price Adults Children $10 9. 100 8 200 7 300 300 300 100 4 300 200 300 200 300 200 1 300 200 300 200 c. Suppose next year government imposes tax equals $4 for selling an every extra ticket, what price would he charge for an adult ticket? For a child's ticket? How much the profit? Assume the law prohibiting him from charging different prices to different customers doesn't exist. (Hint: fixed cost doesn't include)
1. Here is the 2021 revenue for the largest platforms in the social media market. Facebookowns Instagram and WhatsApp, calculate the concentration ratio for the market.
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1. Rio live in a town with 300 adults and 200 children, and he is thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000 except all cost like maintenance costs until two years, but selling an extra ticket has zero marginal cost. Here are the demand schedules for his two types of customer: Price Adults Children $10 9 100 8 200 7 300 6 300 300 100 4 300 200 300 200 300 200 1 300 200 300 200 a. To maximize profit, what price would he charge for an adult ticket? For a child's ticket? How much the profit? (Hint: total cost for this year include fixed cost) b. Suppose in this year, the city council passes a law prohibiting him from charging different prices to different customers. What price does he set for a ticket now? How much profit now? (Hint: when quantity of produced yield maximum revenue or the sum of these both revenues sastify)

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