7. Suppose that the inverse market demand for pumpkins isgiven by P = $10-0.050. Pumpkins can be grown by any-one at a constant marginal cost of $1.ena.If there are lots of pumpkin growers in town so that thepumpkin industry is competitive, how many pumpkinswill be sold, and what price will they sell for?b. Suppose that a freak weather event wipes out thepumpkins of all but two producers, Linus and Lucy.Mesob 017050 Both Linus and Lucy produced bumper crops and havemore than enough pumpkins available to satisfy thedemand at even a zero price. If Linus and Lucy colludeto generate monopoly profits, how many pumpkinswill they sell, and what price will they sell for?c. Suppose that the predominant form of competition inthe pumpkin industry is price competition. In otherwords, suppose that Linus and Lucy are Bertrand com-900 petitors. What will be the final price of pumpkins inthis market- in other words, what is the Bertrandequilibrium price?--700d. At the Bertrand equilibrium price, what will be thefinal quantity of pumpkins sold by both Linus andLucy individually, and for the industry as a whole?How profitable will Linus and Lucy be?Pingooe. Would the results you found in parts (c) and (d) bebuslikely to hold if Linus let it be known that his pumpkinswere the most orange in town, and Lucy let it be knownthat hers were the tastiest? Explain.f. Would the results you found in parts (c) and (d) holdif Linus could grow pumpkins at a marginal costto of $0.95?in a small

In economics, a competitive equilibrium refers to a state of balance in a market where the quantity…

7. Suppose that the inverse market demand for pumpkins is given by P= $10-0.050. Pumpkins can be grown by any- one at a constant marginal cost of $1. a. If there are lots of pumpkin growers in town so that the pumpkin industry is competitive, how many pumpkins will be sold, and what price will they sell for? b. Suppose that a freak weather event wipes out the pumpkins of all but two producers, Linus and Lucy.

7. Suppose that the inverse market demand for pumpkins is given by P= $10-0.050. Pumpkins can be grown by any- one at a constant marginal cost of $1. a. If there are lots of pumpkin growers in town so that the pumpkin industry is competitive, how many pumpkins will be sold, and what price will they sell for? b. Suppose that a freak weather event wipes out the pumpkins of all but two producers, Linus and Lucy.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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