market demand conditions and long-run costs of production for individual firms in the ma ies produce an identical product and face identical cost curves. nies successfully coordinate supply decisions to maximize profit as a cartel. symbol) on the graph to indicate the quantity of monthly contracts the cartel will supply tically extend to both axes. MR LRATC members Demand 400 600 800 housands of monthly contracts) 1000 Cartel Outcome Competitive Outcome ? their prices in order to increase market share. symbol) to indicate the price and quantity that will prevail in the long run if all firms in th

market demand conditions and long-run costs of production for individual firms in the ma ies produce an identical product and face identical cost curves. nies successfully coordinate supply decisions to maximize profit as a cartel. symbol) on the graph to indicate the quantity of monthly contracts the cartel will supply tically extend to both axes. MR LRATC members Demand 400 600 800 housands of monthly contracts) 1000 Cartel Outcome Competitive Outcome ? their prices in order to increase market share. symbol) to indicate the price and quantity that will prevail in the long run if all firms in th

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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8. Suppose there are two firms in the market. The market demand is Q=100-p and the marginal cost of production is constant at 40. What is the outcome of price and quantity and the total welfare if those two firms compete like perfect competition? What is the outcome of price and quantity and the total welfare when those two firms merge into a monopoly? What are the pre-merger HHI, post-merger HHI and change in HHI? How does the Horizontal Merger Guideline 2010 classify this proposed merger?
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Answer this for me mate. Much appreciated.
(Figure: Market Demand Curve I) The graph shows the market demand curve. Price (S) 40 35 2 28 24 20 16 12 36 32- 8 4- D 8 9 10 Quantity The equilibrium price in a Cournot duopoly with identical goods is $ a.8. b. 12 c.24 O d. 18.64 0 MC=AC MR 1 2 3 4 5 6 7
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Econ 1
2. Deviating from the collusive outcome Mays and McCovey are beer-brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and equals $0.40 per can. Assume that neither firm had any startup costs, so marginal cost equals average total cost (ATC) for each firm. Suppose that Mays and McCovey form a cartel, and the firms divide the output evenly. (Note: This is only for convenience; nothing in this model requires that the two companies must equally share the output.) Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and combined quantity of output if Mays and McCovey choose to work together. PRICE (Dollars per can) 1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0 + 0 Demand 20 40 MR MC = ATC 60 80 100 120 140 160 180 200 QUANTITY (Cans of beer) When they act as a profit-maximizing cartel, each company will produce information, each firm earns a daily profit of $…
14. Aside from advertising, how can monopolisticallycompetitive firms increase demand for their products? 17. Would you expect the kinked demand curve to bemore extreme (like a right angle) or less extreme (like anormal demand curve) if each firm in the cartel producesa near-identical product like OPEC and petroleum?What if each firm produces a somewhat differentproduct? Explain your reasoning.
2. Deviating from the collusive outcome Stargell and Schmidt are brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and equals $0.20 per can. Assume that neither firm had any startup costs, so marginal cost equals average total cost (ATC) for each firm. Suppose that Stargell and Schmidt form a cartel, and the firms divide the output evenly. (Note: This is only for convenience; nothing in this model requires that the two companies must equally share the output.) Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and combined quantity of output if Stargell and Schmidt choose to work together. PRICE (Dolars per can) 1.00 090 080 0.70 080 0.50 6.40 0.30 0:30 6.10 0 Demand D 20 40 MR 60 00 100 120 140 QUANTITY (Cans of beer) MC ATC 140 160 200 Monopoly Outcome
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Discussion Question 13-11 Network effects give Internet firms a boost with respect to first mover advantages. This is because with network effects O whichever firm's network becomes the largest will become the most valuable to potential customers and will therefore attract even more users. O only firms with access to proprietary technology can form a network. O networks can be networked to create even more traffic and profits. O the first internet firm to establish a network has the most influence over any regulation. When network effects are at play, an increase in the number of people using a given product will shift the demand curve to Oright and make it more elastic. O the right and make it more inelastic. O left and make it more inelastic. O left and make it more elastic. NOV 12 tv NA 10