Is it possible for a firm in an oligopolistic market to make a product differentiation. If yes, please explain by providing example. If not, please explain why it is not possible.
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Q: Question-4 (Duopoly) There are two firms in the pumpkin industry: C and S. The demand function for…
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Q: Assume the figure on the right shows the cost structure for a monopolistically competitive firm…
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Q: Suppose the figure to the right represents the market for a particular brand of shampoo, such as…
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Q2) Is it possible for a firm in an oligopolistic market to make a product differentiation. If yes, please explain by providing example. If not, please explain why it is not possible.
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- Scenario: You have been invited for a job interview to Armenian Tobacco, a company producing and selling cigarette products in Armenia and abroad. Before going to interview you discussed it with your friends and you all agreed that the cigarettes' market structure can be considered as monopolistically competitive. Upon arriving to the interview you receive a short questionnaire, as follows: Armenian Tobacco is developing its strategy for the next few years, and among others we would like to know your opinion about the following points: 1) We would like to increase our advertising expenditures abroad as we believe it will enable us to gain more market share in our overseas operations. What is your opinion about advertising expenditures and their economic purpose? 2) There is a certain threat that in the future the World Health Organization will make all the countries to remove any labeling from cigarette boxes – all the boxes of all cigarettes area going to be the same without any…Question-4 (Duopoly) There are two firms in the pumpkin industry: C and S. The demand function for pumpkins is q = 3, 2001, 600p. The total number of pumpkins sold at the market is q =qc+qs, where qc is the number that C firm sells and qs is the number that S firm sells. The cost of producing pumpkins for either firm is $0.50 per pumpkin no matter how many pumpkins they produces. 1. Every spring, each of the firms decides how many pumpkins to grow. They both know the local demand function and they each know how many pumpkins were sold by the other firm last year. In fact, each firm assumes that the other firm will sell the same number this year as its sold last year. So, for example, if firm S sold 100 pumpkins last year, firm C believes that firm S will sell 100 pumpkins again this year. If firm S sold 100 pumpkins last year, what does firm C think the price of pumpkins will be if firm C sells 1,200 pumpkins this year? 2. Suppose that in year 1, firm C produced 200 pumpkins and firm S…In comparing an oligopolistic firm to a perfectly competitive firm it is generally assumed that the price charged by the competitive firm will be higher than the price charged by the oligopolistic firm. True or False (Explain)
- If this graph represents the market for Sonoran hotdogs in Tucson , which statement is true? A The market is monopolistically competitive and at its long run equilibrium B The market is a monopoly and firms are earning positive profits C The market is an oligopoly and firms are earning positive profits D The market is perfectly competitive and firms are suffering losses E The market is monopolistically competitive and not at its long run equilibrium(a) There are two companies in the world that produce large passenger aircraft, Boeing, and Airbus. How would you characterize the market for large passenger aircraft, monopoly, perfectly competitive, monopolistically competitive or Oligopoly? Please explain. Large passenger aircraft are defined as aircraft than can carry more than 150 passengers. (b) The market for telephone services has become more competitive over time with the advancement of technology in the industry. Technology in the aircraft manufacturing industry has also advanced significantly. Why hasn’t this improvement in technology led to an increase in competition (Boeing and Airbus have been the only manufacturers in this industry for many years)? Please explain.Assume the figure on the right shows the cost structure for a monopolistically competitive firm selling a particular brand of shoes. MC is the marginal cost curve and AC is the average cost curve. If this firm produces 2 thousand pairs of shoes, does it minimize average cost? How much more would they need to produce to reach minimum average cost? The firm needs to produce an additional thousand pairs of shoes to reach minimum average cost. (Enter your response as an integer.) SEED Price (dollars per pair) 80- 72- 64- 56- 48- 40- 32- 24- 16- 8- 0- 0 1 Quantity (in thousands) MC AG 10 Q 20
- A5How would a monopolistically competitive firm determine its profit maximizing level of output and price? Group of answer choices 1-The firm would use industry averages to determine the profit maximizing level of output and price. 2-A monopolistically competitive firm could set any output and price level to yield maximum profit because it controls all of the resources. 3-The firm would determine output based on the intersection of marginal cost and marginal revenue, then examine where that output level intersects with the demand curve to determine the price. 4-The firm would determine output based on the intersection of average cost and marginal cost, then examine where that output level intersects with the supply curve to determine the price.Cournot’s Model of Duopoly) Joe and Rebecca are small-town ready-mix concrete duopolists. The market demand function is Qd=5500-25P, where P is the price of a cubic metre of concrete and Qd is the number of cubic metres demanded every year. The marginal cost is $40 per cubic metre. Competition in this market is described by the Cournot model. (a)Given Rebecca’s output is 2000, what is Joe’s residual demand function? What is Joe's output so he maximizes his profit? (b)If Rebecca’s output is qR, what is Joe’s best response function? (c)If Joe’s output is qj, what is Rebecca’s best response function? (d)Plot both Joe and Rebecca’s best response functions on one graph, where the the horizontal axis represents Rebecca’s output qR and the vertical axis represents Joe's output qR. (e)What is the meaning of the interception of the two best response functions?
- Suppose the figure to the right represents the market for a particular brand of shampoo, such as L'Oreal, Lancome, or Maybelline. Assume the market is monopolistically competitive and is in long-run equilibrium. How much excess capacity does the firm have? The monopolistically competitive firm's excess capacity is thousand bottles of shampoo. (Enter your response as an integer.) C Price and cost (per bottle) 2.00- Q 1.80- MC Q ATC 1.60- 1.40- 1.20- 1.00- 0.80- 0.60- 0.40- 0.20- 0.00+ 0 2 MR D 4 6 8 10 12 14 16 18 20 Quantity (shampoo bottles in thousands)There are two groups of firms below. Group 1: firms in the retail sector (e.g. Amazon; Wal-Mart; Target; Kohl's; Sears; Macy's) Group 2: firms in the wireless services industry (e.g. Verizon; AT & T; Sprint/T-Mobile) (this about telecommunication services, not about the sale of phones) For each group determine and explain if the group is monopolistic competitive or an oligopoly. You need to specific for both in which market structure the firms operate) Then choose one of the firms from one group. Using a Porter's analysis what are the threat to profitability?D2) Explain this concept and give one practical example(oligopoly)