Assume that there are two firms in a market with inverse demand function P(Q) = 120-Q. Both firms have identical marginal costs of 20 and they compete over prices. Assume that a third firm enters the market with the same marginal costs. Describe how the consumer surplus changes. Stays the same O Increases Decreases
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- Exercise A.9 In a market only two firms produce a homogeneous good. You work on one of them and are tasked with drawing up the production strategy for the coming year. The two companies in the market have the same information and the objective of both is the maximization of their profit. You know: the inverse market demand curve of the good: P(Q)=200-2Q where Q = q₁ + q₂ , the function that represents the costs of your company and the rival company: C(qᵢ) = 20qᵢ (for i=1, 2), and the data in the following table, with the optimal decisions according to the different types of competition:C(qᵢ) = 20qᵢ and the data in the following table, with the optimal decisions according to the different types of competition: q1 q2 P Bertrand 45 45 20 Cournot 30 30 80 Collusion 22,5 22,5 110 a) What is more in your company's interest to compete or cooperate with the rival company? Keep in mind that explicit collusion agreements are illegal, so each…WEBCAM RECORDING Industrial Economics da 6 A market is characterised by an inverse demand curve p =8 – 2Q where Q is total quantity. Two firms, A and B, are competing à la Cournot and TCA(qA) = 29A and TCB(qB) = q ta non %3D data Total profits n (1.e. the sum of profit for the two firms) are equal to: ggio max. ontrassegna O (a)n = nda %3D O (b) = 16 O (c)N = 4 O (d) = 9 Precedente SuccessivoThe soluation avilible I believe it is wrong so please solve it carefully Carl and Simon are the only sellers of pumpkins at the market, where the total demand function for pumpkins is q =3 ,200−1,600p. The total number of pumpkins sold at the market is q = qC + qS, where qC is the number that Carl sells, qS is the number that Simon sells. The cost of producing pumpkins for each farmer is $.50 per pumpkin; the fixed costs are zero. .a. Find the Cournot equilibrium price and quantities. .b. Find the Bertrand equilibrium price and quantities. . .c. Suppose now that every spring the snow thaws off of Carl’s pumpkin field a week before it thaws off of Simon’s. Therefore, Carl can plant his pumpkins one week earlier than Simon while predicting Simon’s choice based on the previous year information. Simon observes Carl’s choice and chooses how much pumpkin to plant. Find the new equilibrium price and quantities. .d. Compare the quantities and prices in parts a, b, and c. Rank these outcomes…
- A gas station sells gas for... A gas station sells gas for capacity of a gas station is 700 liters per day, that is it can store any quantity of gasoline up to this capacity. A gas station cannot sell more gasoline per day than it currently stores. Suppose the demand for gasoline is uniformly distributed between 0 and 1500. Profit of a gas station is given by its revenue from selling gasoline minus the cost of buying it from a wholesaler. Provide a numerical answer to each question. ipertiterandbussitusingthewholesalepricco p0.5 per liter. A storage 2) Given the current storage capacity, find the quantity of gasoline the gas station must store in order to maximize its expected daily profit.Suppose there are only two firms in a competitive market for a good. Firm 1's marginal cost curve is given by MC = 2.5 +0.5Q and the equation of 4+Q³. What is the equation of the - firm 2's marginal cost curve is MC supply function for this market? - a) MC = 6.5 +1.5Q⁹ b) MC = 0.33Q⁹ +3 c) Q³ = 3p - 9 d) P = 6.5 +1.5QsCoke and Pepsi dominate the cola market. Suppose that the marginal cost of making cola is $2. Assume also that the demand for cola is given by the following table: Price $8 7 6 5 4 3 2 1 Quantity 5 cans 6 7 8 9 10 11 12 If there were a large number of producers, so that the cola market was competitive, how many bottles of cola would be sold? Type your answer...
- The figure below shows the supply and the demand for a good (left) and the cost curves of an individual firm in this market (right). Assume that all firms in this market, including the potential entrants, have identical cost curves. Initially, the market is in equilibrium at point A. Price 6 Cost 17 D 8 10 12 Quantity ATC O the price is $1.00 and the quantity sold is 6 units O the price is $3.00 and the quantity sold is 2 units O the price is $2.00 and the quantity sold is 2 units O the price is $2.00 and the quantity sold is 4 units Quantity Refer to the figure above. Suppose that the market has reached the long-run equilibrium. Then, due to news of the product's defects and recall, the demand falls by 2 units at each price. The market will tend toward the new long run equilibrium whereDefine economic efficiency. Is a firm economically inefficient if it can cut costs by producing less? Why?The BCY Corporation provides accounting services to a wide variety of customers, most ofwhom have had a business association with BCY for more than five years.BCY's demand is: P = 24,000 – 20Q, and BCY's marginal cost of service is: MC = 40Q.a. If BCY charges a uniform price for a unit of accounting service, Q, what price must itcharge per unit, and how many units must it produce per time period in order to maximizeprofit? Calculate the consumer surplus.b. If BCY could enforce first-degree price discrimination, what would be the lowest pricethat it would charge and how many units would it produce per time period?c. With perfect price discrimination and ignoring any fixed cost, what is total profit andwhat is the amount of consumer surplus?
- The car manufacturing market consists of100 identical factories, each with a marginalcost curve represented by MC =120 + 20where Q represents the amount of carsoffered.a) Derive the industry supply curve for cars.b) If the demand for cars is represented byP=250- 4Q, how many cars are bought atequilibrium?c) Calculate the aggregate consumer andproducer surplus at market equilibrium.In this problem, p is in dollars and x is the numbey of units. If the demand function for a product isp = 9/(x + 1) and the supply function is p = 1 + 0.2x, find the consumer's surplus under pure competition. (Round your answer to the nearest c 24Firms can choose a location in the linear city of length 1 with fixed cost of 25. Consumer density at any location x in the linear city is 400. a) Show that a firm each at 0.125, 0.375, 0.625 and 0. 875 is not an equilibrium. b) What is the equilibrium number of firms and th6ir locations? c) Illustrate how entry is no longer profitable at equilibrium? Plz do fast