3. Dynamic Games of Industrial Organisation companies produce the same good. In the first period, firm 1 sells its prod- uct as a monopolist in Paris. In the second period, firm 1 competes with firm 2 in Berlin as a Cournot duopolist. There is no discounting between the two pe- riods. Firm 1 produces quantity xp

3. Dynamic Games of Industrial Organisation companies produce the same good. In the first period, firm 1 sells its prod- uct as a monopolist in Paris. In the second period, firm 1 competes with firm 2 in Berlin as a Cournot duopolist. There is no discounting between the two pe- riods. Firm 1 produces quantity xp

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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. Profit maximization and loss minimization BYOB is a monopolist in beer production and distribution in the imaginary economy of Hopsville. Suppose that BYOB cannot price discriminate; that is, it sells its beer at the same price per can to all customers. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. Suppose that BYOB charges $2.50 per can. Your friend Clancy says that since BYOB is a monopoly with market power, it should charge a higher price of $3.00 per can because this will increase BYOB’s profit. Complete the…
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1 . Profit maximization and loss minimization BYOB is a monopolist in beer production and distribution in the imaginary economy of Hopsville. Suppose that BYOB cannot price discriminate; that is, it sells its beer at the same price per can to all customers. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market. PLEASE HELP ME
Question 4 ( 4 µ There are two taco places in a city. Demand for taco is given by Q = 200-10P. Each place has the cost function C = 50+5Q. If the two places behave as duopolists: 2 (a) What is the reaction function of each taco place? (b) What is the Cournot equilibrium price? How much is the profit of each place?
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Pleasant Island has two natural gas wells, one owned by Mack and the other owned by Tom. Each well has a valve that controls the rate of flow of gas, and the marginal cost of producing gas is zero. The table below gives the demand schedule for gas on this island. Price (dollars per unit) $100 88888; 70 50 30 20 10 0 Quantity Demanded (units per day) If Mack and Tom form a cartel and maximize their joint profits, the price of gas on Pleasant Island will be $ If Mack and Tom are forced to sell at the perfectly competitive price, the price of gas on Pleasant Island will be $ 5 15 25 35 45 55 65 per unit. (Enter your response as a whole number) per unit (Enter your response as a whole number)
a)What are the main characteristics of a monopolist firm? b) Suppose a monopolistically competitive firm operates in a long run which produces 50units of output at 150 taka per-unit cost (average total cost). Also MC of producing 50 unitoutput is 80 taka. By using this information, show the long run situation of a monopolisticallycompetitive firm in an appropriate diagram. c) Calculate excess capacity if socially efficient output is 120 units. Show it in graph too.[Note: b) and c) are related questions and draw separate graphs for each question]
Under the cartel, the individual firm's quantity is (assuming it obeys its quota) Market for Oil One Country's Oil P S- MC MC ATC MR MR MR Figure 42.2 Multipie Choice 02
How many of the below statements are incorrect? -> Under discriminating monopoly, different prices may be charged to different buyers for the same product. -> Each oligopolist firm is of the opinion that its competitors will match its increase in price above the prevailing level. -> Monopolistic competition is a theoretical concept.
Which of the following is NOT an advantage that could allow monopolies to enhance consumer welfare? Monopolies have larger R&D budgets, and can develop ambitious products more quickly. Monopolies have more bargaining power and can negotiate for lower input prices, allowing them to cut costs. Monopolies earn more profit and provide more benefit to shareholders. Monopolies can waste less money duplicating the efforts of their competitors. O Monopolies granted under patent and copyright law provide larger monetary incentives for innovation.
Economics: Industrial Economics Question: A duopoly exists in the market for lumber in a town. It costs the first company, Big Cutters, $16 per cord of wood while it costs the second company, Pine Stackers, $10 per cord of wood. The local market demand curve for wood is Q-31,000-100P. Assume each has the capacity to serve the entire market and that they can only price in whole dollar amounts (i.e.$30, not $29.99). Assume initially that Cutters and Stackers decide to collude and split the market. How many cords of wood will they sell? Choices: A. 12,000 B. 9,000 C. 15,000 D. 20,000 2. What will be the price they charge? Choices: A. 190 B. 210 C. 110 D. 160 3. How much will Big Cutters produce? Choices: A. 9,000 B. 4,500 C. 0 D. 15,000 Now assume that collusion is not possible. 4. What is the Nash Equilibrium quantity that Pine Stackers Choices: A. 0 B. 15,300 C. 14,700 D. 29,500 5. What is the Nash Equilibrium price? Choices: A. 15 B. 112 C. 11 D. 157 Thank you for your…