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Case Study-2
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- Topic B Problem: When the Edmonton Oilers built a new arena, Rogers Place, they claimed that they raised ticket prices to cover the higher costs associated with the new stadium. If the Oilers are profitable, should the extra costs from a new arena be responsible for raising ticket prices? If your answer is no, explain why ticket prices rise after building a new arena. To keep the Topic B problem simple, assume the Oilers are a monopoly in their market and assume there is only one ticket price. Hint: determine if a new arena is a fixed or variable cost.A monopolistically competitive market structure is defined as having no barriers. meaning firms can freely enter and exit based on profit levels. Question 2 A monopolistically competitive market structure is defined as having large barriers which prevent other firms from entering True FalseEconomics: 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…
- Identify 4 similarities between monopoly and monopolistic competition. Draw graph if necessaryOligopolistic Competitive Demand: Would the following factors increase or decrease the ability of domestic oil companies to raise prices and profit margins? Why? A. Train Law: excise tax B. Increased price of automobiles C. Increased import tariffs (taxes) D. A rising value of the dollarWS3 Assignments Chapter 10 Problem Set Chapter 10 Problem Set Question According to the prisoner's dilemma, which of the following are true about oligopolies? Please select two correct answers. Select all that apply: U If oligopolists cooperate with one another, any firm that betrays another will be forced to exit the market. If oligopolists agree to cooperate, each oligopolist must worry about being betrayed. If oligopolists agree to cooperate, more firms can enter the market. Even when oligopolists agree to cooperate, they are self-interested and want to pursue higher profit opportunities. This could result in firms betraying one another.
- What are the key trade offs of imperfect competition? Question 8 options: The monopolistically competitive market structure fails to achieve allocative efficiency, but the firms all face perfectly elastic demand curves. The monopolistically competitive market structure provides powerful incentives for innovation, but the strongest firms in a monopolistically competitive market become oligopolists. The monopolistically competitive market structure allows firms to achieve economic profit in the short run, but the individual firms all face perfectly elastic demand curves. The monopolistically competitive market structure provides powerful incentives for innovation, but they never achieve productive efficiency in the long run.How does advertising impact monopolistically competitive firms? (a) advertising always causes monopolistically competitive firms to experience lower average costs (b) it either causes a firm's perceiveddemand curve to become more elastic, or advertising causes demand for the firm's product to increase.11. Consider the interaction between a retailer and a manufacturer. The manufacturer's marginal cost is 2 and it sets the price p in the first stage of the game. The retailer purchases the product from the manufacturer at this price (so the retailer treats p as its marginal cost) and sells the product at price r in the second stage of the game (this makes the retailer's profit function (r p)g). The market demand is q = 12 – 2r. What will be the prices set by the manufacturer and by the retailer?
- Define Oligopoly market structure . Discuss the barriers to entry and exit in an oligopoly market .(micReal life Example of monopolistic competition ( product differentiation) homogenous product,differentiated product,perceived product, real differentiation,two segmentPlease give me correct and incorrect answer explanation Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
