4. A model of network externalities. Suppose that there are 50 potential consumers in the market for a new technology that exhibits network effects. There is a uniform distribution of consumers with individual valuations, v, ranging from $1, $2,..., $50. Consumer valuation from consuming the technology is given by vN, where N is the number of consumers adopting the technology. Consumers with purchase the product as long as their valuation is greater or equal to the price, so that the marginal consumer has a valuation such that p-yN. The number of consumers adopting the technology is given by the number of people with valuation greater than y, i.e. N=50-v. a) Using the information above, derive the relationship between the price of the product and the number of consumers adopting the product, N. Characterize this relationship - does it reflect a typical market demand curve? b) If the price for the product is $600, find the three equilibrium number of adopters in the market.

4. A model of network externalities. Suppose that there are 50 potential consumers in the market for a new technology that exhibits network effects. There is a uniform distribution of consumers with individual valuations, v, ranging from $1, $2,..., $50. Consumer valuation from consuming the technology is given by vN, where N is the number of consumers adopting the technology. Consumers with purchase the product as long as their valuation is greater or equal to the price, so that the marginal consumer has a valuation such that p-yN. The number of consumers adopting the technology is given by the number of people with valuation greater than y, i.e. N=50-v. a) Using the information above, derive the relationship between the price of the product and the number of consumers adopting the product, N. Characterize this relationship - does it reflect a typical market demand curve? b) If the price for the product is $600, find the three equilibrium number of adopters in the market.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

It is about travel method problem. You have been commissioned to estimate the demand curve for admission to EuroLand, an amusement park in France. To do this, you spend a day surveying visi tors to the park. Before doing this, you divide the area around the park into 10 zones with the distance from the park approximately constant within a zone. You ask each person you interview where they come from. Based on that information, and figures on annual attendance at the park, you are able to calculate the annual number of visitors from each zone. Your data are shown below: (table) Zone Distance from park (km) Zonal population Number of visitors 1 10 5,000 500 2 20 10,000 900 3 30 25,000 2,000 4 40 10,000 700 5 50 100,000 6,000 6 60 500,000 25,000 7 70 200,000 8,000 8 80 50,000 1,500 9 90 100,000 2,000 10 100 100,000 1,000 You note that admission to Euroland is 150 euros per person. you also calculate that transportation costs, including time costs, are…
Refer to the images 'Facebook versus Google Plus'. And answer the question below Why did Google Plus fail as a social networking site?
2.19. Standard setting. Suppose Apple and Samsung are in the process of negotiating a common standard for a new 3D camera tech- nology they plan to introduce in the next generation of smartphones. Apple has a preference for standard A, whereas Samsung has a pref- erence for standard S. However, both recognize that multiple stan- dards are a worse outcome for all. Specifically, Apple gets 240 if it selects A and Samsung does so too, but only 20 if Samsung does not adopt A. If Apple adopts standard S and Samsung does so too, then Apple gets a payoff of 190. If, however, Samsung chooses A then Ap- ple gets zero. For Samsung, the situation looks similar: If Samsung chooses standard S and Apple does the same then Samsung gets 210, but if Apple chooses A the Samsung's payoff is only 30. If Samsung opts for standard A and Apple does so too then Samsung gets a pay- off of 110, whereas if Apple chooses standard S then Samsung gets a payoff of zero. (a) Suppose that both Apple and Samsung…
(a) Assuming that each fishery chooses fi ∈ (0, F), to maximize its payoff function, derive the players’ best response functions and find a Nash equilibrium. (b) Is the equilibrium you found in (a) unique or not? What are equilibrium payoffs? 4 (c) Suppose that a benevolent social planner wants maximize the utility of both fisheries. In other words, the social planner solves the following problem: max w(f1,f2) w(f1, f2) = u1(f1, f2) + u2(f1, f2) =2 ln(f1) + 2 ln(f2) + 2 ln(F − f1 − f2). Find the social planner’s solution. (d) What are the fisheries’ payoffs if the quantities of fish they catch are solutions to the social planner’s problem? What can you say about the Nash equilibrium quantities of fish being caught as compared to the social planner’s solution? (e) If fishery j decides to follow the recommendation of the social planner, how much fish will firm i catch?
Monopoly: End of Chapter Problem 5. Firms use price discrimination to increase their profits by converting part or all of consumer surplus to producer surplus. Which of the following market conditions is not necessary for a firm to engage in price discrimination? O A firm must have the ability to prevent arbitrage. A firm must have the ability to separate consumers intoigroups based on their elasticities of demand. O A firm must have the ability to hide their prices from consumers. A firm must have some market power. Publisher: Worth Publishers 7:41 PM Question Source: Chiang 4e - Economics Principles For A Changing World 39°F A O 1 a I E 4) 23 12/12/2021 a
200- 100- 66.7-- 50- a B's best response 50 100 66.7 B) 50 pizzas. A's best response C) 25 pizzas. The above figure shows the reaction functions for two pizza shops in a small isolated town. The Stackelberg leader will produce A) 100 pizzas. 200 D) 66.7 pizzas. 4p S E
31 Joe Low Effort Sarah Low Effort High Effort 7 7 High Effort 15 5 13 6 10 9 The figure shown represents the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive. What payoff can we predict Joe will receive as the outcome of this game? Multiple Choice О О 5 7 О 13
RAGERIAL ECO X Question 3 Chapter 17 & 19 P X 13.1 Objectives and Methods of X a the more elastic the demand for x + https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl... A to 9 ( & 19 Problems Saved Help Save & Exit In an oligopolistic market, Multiple Choice the smaller the number of firms and the more elastic the demand, the greater the markup. the larger the number of firms and the more elastic the demand, the greater the markup. the larger the number of firms and the less elastic the demand, the greater the markup. the smaller the number of firms and the less elastic the demand, the greater the markup. Submit g 53
a) Consider that 2 agents make up the demand side of a market. Person A's marginal benefits are MBA 60-0.25Q, and person B's marginal benefits are MBB 60 GB Find market-level marginal benefits
Refer to the following payoff table: Firm A's Advertising Budget Low Multiple Choice Medium High A D G $900, $900 Low $1,000, $800 Firm A High; Firm B Low Firm A Low; Firm B Low Firm B's Advertising Budget Medium B E H $820, $1,220 $950, $1,025 с F 1 High $875, $920 $800, $875 $1,025, $1,175 Using the method of successive elimination of dominated strategies, which strategies, if any, are eliminated after the first round? $1,060, $1,100 $1,040, $1,000
which is the nash equilibrium? small pig does press large pig does press (20, 130), small pig doesn't press large pig does press (140, 10), small pig does press large pig doesn't press (-5, 150), small pig does not press large pig doesn't press (0,0).
2ii