Q: Suppose that the market for cashmere sweaters is a competitive market. The following graph shows the…
A: Given values: The market price in the short run = $45
Q: Firm A produces good X and Firm B produces good Y with the following demand functions: Qx = 150 -…
A: The demand function shows the inverse relationship between price and quantity demanded. The demand…
Q: Define the following: Producer Equilibrium Game Theory Welfare function
A: a) Producer equilibrium is an equilibrium state where the producer uses the optimal combination of…
Q: Suppose two firms producing identical products compete in prices. If demand can be written as Q = a…
A: Oligopoly is referred to as a market structure where there are a small number of firms and these…
Q: Give a discussion from the economies of scale perspective on the statement “trade need not be the…
A: Economies of scale refers to the decreasing average cost with increasing output unit that means when…
Q: Suppose there are only two firms in a competitive market for a good. Firm 1's marginal cost curve is…
A: we are given with the situation where in there are only two firms in a competitive market,their…
Q: Verizon can be viewed as a first mover. Now suppose both ATT and Verizon are considering whether…
A: P = 900 – q1- q2 a) In the first stage, Verizon has a large scale supermarket, and as a result, ATT…
Q: Carl and Simon are the only sellers of pumpkins at the market, where the total demand function for…
A: Carl and Simon are the only sellers of pumpkins at the market, where the total demand function for…
Q: A study of ethanol as a transportation fuel reveals that the competitive equilibrium is expected to…
A: The competitive equilibrium lies at the output level where the quantity demanded, and quantity…
Q: Explain the topic Theory of mercantilism
A: The nations around the world work with the objective, or motive of enhancing their development…
Q: What is then the use or relevance of the purely competitive model?
A: Pure competition is a market system in which multiple firms compete for the same clients. The best…
Q: Consider the following perfectly competitive market for oranges: Qs = 5P Qd = 60 – 5P…
A: Market equilibrium: At the market equilibrium we have demand equals to supply. Or at market…
Q: Suppose the market demand for ECO textbooks at the University is given by ?=1000−2?Q=1000−2P. The…
A: We have MC1=MC2=50 which means symmetry of cost.
Q: Assume that the cannabis firm called Aphria Inc. purchases resources a and b under perfectly…
A: The profit is maximum at:MP* price equal to input prices
Q: Suppose two firms compete in selling identical widgets. They choose their output levels Q1 and Q2…
A: at market equilibrium both firms determine the price and output level. The price and output level…
Q: Consider the market for Atlantic salmon. Petuna, Tasmania’s smallest salmon farm, and Huon…
A: The firms here are price takers. For price-taking firms, profit-maximizing quantity is where price…
Q: Question 1 Suppose that the cost function of a firm is C(q)=4q. Suppose that this is the only firm…
A: There is monopoly in the market because there is single seller. The profit maximizing quantity in…
Q: Suppose you run a resort just outside of Mesquite, Nevada. The following table represent- the…
A: Individual pricing: The most recent automated pricing model that retailers can use is personalized…
Q: Discuss why Ei(p∗) = 0 is compatible with a competitive equilibrium.
A: In competitive marketplaces with freely determined prices, competitive equilibrium occurs when…
Q: Mavi and Diesel both make basic blue jeans. The demand curves for the two firms are given by…
A: Marginal cost is the ratio of change in total cost to the change in output. The marginal cost is the…
Q: Verizon can be viewed as a first mover. Now suppose both ATT and Verizon are considering whether…
A: Given that. P = 900 – q1 – q2 For small store, I = 50,000 And MC = 0 For super market I = 1,75,000…
Q: Find supporting evidence that competition makes markets more efficient in this case.
A: Competition arises when the number of sellers in the market increase, as more firms join an industry…
Q: 7. 2 firms are engaged in Bertrand competition. They each face the following cost curve C(Q) =…
A: Bertrand equilibrium refers to the equilibrium where the price is equal to marginal cost. It means…
Q: Illustrate and explain how equilibrium is determined in an olipolistic market.
A: Markets that are controlled by a limited/less number of sellers are known as oligopoly markets. They…
Q: How would a decrease in demand for commercial air travel in an oglipolistic market effect the…
A: "Commercial air travel' can be distinguished as a structure of an oligopoly market in which a…
Q: How satisfying the assumptions of perfect competition and partial equilibrium makes it impossible to…
A: In economics the supply curve refers to a graphic representation of the correlation among the cost…
Q: The best estimates of the market demand and supply for the good (in U.S. dollar equivalent prices)…
A: Given - Market demand Qd = 12 - 2P Market supply Qs = -4 + 2P
Q: The market for lattes in Regina, Canada is shown in the attached graph. a) If a coffeehouse charges…
A: A firm earns profit if price exceeds average cost and incurs loss if price is less than average…
Q: Define economic efficiency. Is a firm economically inefficient if it can cut costs by producing…
A: Economics deals with the allocation of limited resources to maximize the welfare of the economy. It…
Q: Discuss penetration Pricing model in a market economy
A: Penetration pricing is a marketing strategy widely used in a market economy to introduce a new…
Q: Suppose the demand for taxis in a town is p = 10 - Q. There are only two taxi companies, and each…
A: Cournot model assumes Nash equilibrium which means that each firm in cournot model chooses its…
Q: The following graph illustrates the market for small moving trucks in Oviedo, FL, during UCF's fall…
A: A perfectly competitive firm is a price taker, which means it takes the price set by the market…
Q: Consider two Cournot firms, Firm A and Firm B. Firm A has a marginal cost of 10 and Firm B has a…
A:
Q: Consider a firm that produces glass. Glass production involves melting sand, soda ash, and limestone…
A: A constraint restricts or prohibits the success of a particular production procedure. According to…
Q: Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run…
A: A perfectly competitive firm is a price taker as there are many firms producing identical goods. It…
Q: The demand function for a truckload of firewood in a small town with a college is Q = 200 - 1.5p for…
A: Demand function for college students:- Q = 200 - 1.5P Demand function for non students:- Q = 200 - p
Q: Everyone shops for things they need for themselves and for gifts for others. Imagine you are taking…
A: Both production and consumption are important economic activities. As it is very popularly known, a…
Q: Free exchange occurs under perfect competition and mutually benefits both consumers and producers.…
A: Free trade basically refers to that countries can import and export goods without having to deal…
Q: Suppose the global market for personal computers is monopolistically competitive. If a country…
A: Monopolistic competition is a market structure in which many firms compete by producing similar but…
Q: Suppose there are just two firms, 1 and 2, in the oil market and the inverse demand for oil is given…
A: Marginal cost is the additional cost earned in order to produce an additional unit of output.
Q: CENGAGE MINDTAP Assignment 8 (Ch 14) 1 + 0 0 1 2 3 4 5 6 7 8 9 10 QUANTITY (Millions of small boxes)…
A: As the equilibrium price is given to be $5, so we take $5 price for each unit.Total Revenue = Price…
Q: Show demand formula (components) for a closed economy case
A: As per the economist, a closed economy is an economy that does not take part in international…
Q: If Wikipedia were provided in a competitive market, and the contributors of Wikipedia were only in…
A: Competition is the battle between producers to increase profits, increase sales, and so on. To look…
Q: Identify whether or not each of the following scenarios describes a competitive market, along with…
A: A competitive market is a marketplace where numerous sellers offer nearly identical products or…
Q: consider a market with a large number of firms, an upward sloping supply curve S0, and a downward…
A: Question - Now suppose that scientists discover that this particular product has a significant…
Q: In the graph below we model the long-term rental market (i.e. contract of 6 months or more),…
A: Demand Schedule: Demand schedule for a good is a combination of different price and optimal quantity…
Explain in a maximum of 10 lines whether or not the
Step by step
Solved in 2 steps
- True or false: In a perfectly competetive market, when AVP<P<ATC, a firm will not produce any output to minimize its costs. Explain why using a graph.Two firms, Incumbent & Entrant, can produce the same good. The market demand for the good is given by P = 180 – Q, where P is the market price and Q is the market quantity demanded. The firms must pay w = 45 per unit of output for labour and r = 45 per unit of output for capital (one unit of capital is used per unit of output), but Incumbent may choose capacity KI units of capital before Entrant decides whether to enter the market. Suppose firms each have fixed costs FI =600, FE=500. Incumbent chooses (as a Stackelberg leader) capacity KI equal to the monopoly profit- maximizing quantity. When you answer the following questions, show your work. a. Would Incumbent be able to prevent entry by choosing capacity KI equal to the monopoly profit-maximizing quantity? Explain. b. What is the Incumbent’s equilibrium choice of capacity KI in this Dixit game? c. Does the Incumbent’s choice of capacity KI in part (b) qualify as predatory conduct (here, limit output)? Explain.Is Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply (S = MC) curves in the market for hot dogs. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition. (?) PRICE (Dollars per hot dog) 5.0 4.5 4.0 8 3.5 3.0 2 25 e 20 1.5 0.5 + 0 0 10 20 Competitive Market S-MC 30 40 50 60 70 QUANTITY (Hot dogs) 80 90 D 100 + PC Outcome Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. This firm buys up all the rest of the hot dog vendors in the city and operates as a monopoly. Assume that this change doesn't affect demand and that the new monopoly's marginal cost…
- Two firms (called firm 1 and firm 2) are the only sellers of a good for which the demand equation is Here, q is the total quantity of the good demanded and p is the price of the good measured in dollars. Neither firm has any fixed costs, and each firm’s marginal cost of producing a unit of goods is $2. Imagine that each firm produces some quantity of goods, and that these goods are sold to consumers at the highest price at which all of the goods can be sold. A Cournot equilibrium in this environment is a pair of outputs (q1, q2) such that, when firm 1 produces q1 units of goods and firm 2 produces q2 units of goods, neither firm can raise its profits by unilaterally changing its output. Find the Cournot equilibrium. Determine whether the price at which the goods are sold exceeds marginal cost.A Cournot Market has 2 firms and initially begins in equilibrium. Firm 1 is going to buy firm 2 so the firms will merge. If there are no economies of scope, explain why they would still merge. Attempt the grapha) How can a firm determine the best level of output and price for products that are jointly produced in fixed proportions?
- Pete sells two different soups (chicken soup and beef soup) in two competitive markets. Suppose the firm's cost function is given by C = ½ q1^2 + ¼ q2^2 - 1/6 (q1)(q2) where q1 is the output of chicken soup and q2 is the output of beef soup. The price of beef soup is $3. a. Find the firm's supply curve for chicken soup. b. Find how the firm's supply of beef soup varies with the price of chicken soup Show work and explainIf two businesses are selling the same good or service, who would benefit if theycooperated on pricing? Who would benefit if they competed based on pricing?Question 3 Suppose that the cost function of a firm is C(q)=4q. Suppose that this is the only firm in the market, and demand is Q(p)=10-p. What is the amount of the good produced in a competitive equilibrium in this economy? 7 4 6 3 5
- How does the optimal price depend on the unit cost of producing a set of clubs?Back in 2012, the world’s largest provider of chipsets for devices (e.g. smartphones, tablets) running on 4G network signed an agreement with one of the leading device manufacturers, committing to make significant payments to this manufacturer on condition that the manufacturer would exclusively use its chipsets. This was found to be violating competition law. a) Use economic theory to explain why such an agreement violates competition law and can hinder competition in the market. b) If you are working for the chipsets provider, how can you use economic theory to defend your company? (1000 words)P(Q) (or MSB) = 50 - 0.5Q Р(О) (MPC) %3 25 + 0.5Q МЕС - 0.5Q Рс (Соmpetitive Equilibrium Price) %3 37.50 Qc (Competitive Equilibrium Quantity) = 25 Pe (Efficient Equilibrium Price) = 41.67 Qe (Efficient Equilibrium Quantity) = 16.66 1) Sketch the curves for these functions and illustrate the competitive equilibrium and label Pc and Qc and efficient equilibrium (labelling Pɛ and QE). 2) On the diagram from part 1, illustrate the areas that correspond to the loss in profit for the firm, the total gain to society and the net gain to society when comparing the competitive equilibrium to the efficient equilibrium