Problem 10-17 (algo) At a time when demand for ready-to-eat cereal was stagnant, a spokesperson for the cereal maker Kellogg's was quoted as saying, " for the past several years, our individual company growth has come out of the other fellow's hide." Kellogg's has been producing cereal since 1906 and continues to implement strategies that make it a leader in the cereal industry. Suppose that when Kellogg's and its largest rival advertise, each company earns $0 billion in profits. When neither company advertises, each company earns profits of $11 billion. If one company advertises and the other does not, the company that advertises earns $46 billion and the company that does not advertise loses $2 billion. For what range of interest rates could these firms use trigger strategies to support the collusive level of advertising? Instruction: Enter your response as a percentage rounded to the nearest whole number. is 314 percent

Problem 10-17 (algo) At a time when demand for ready-to-eat cereal was stagnant, a spokesperson for the cereal maker Kellogg's was quoted as saying, " for the past several years, our individual company growth has come out of the other fellow's hide." Kellogg's has been producing cereal since 1906 and continues to implement strategies that make it a leader in the cereal industry. Suppose that when Kellogg's and its largest rival advertise, each company earns $0 billion in profits. When neither company advertises, each company earns profits of $11 billion. If one company advertises and the other does not, the company that advertises earns $46 billion and the company that does not advertise loses $2 billion. For what range of interest rates could these firms use trigger strategies to support the collusive level of advertising? Instruction: Enter your response as a percentage rounded to the nearest whole number. is 314 percent

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. Comparing monopolistic competition and perfect competition Suppose that a firm produces tennis racquets in a monopolistically competitive market. The following graph shows its demand curve (D), marginal revenue curve (MR), marginal cost curve (MC), and long-run average cost curve (LRAC). Assume that all firms in the industry face the same cost structure. Place the tan point (dash symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place the purple point (diamond symbol) to indicate the point at which this firm would produce in the long run if it operated in a perfectly competitive market. Note: Dashed drop lines will automatically extend to both axes. PRICE, COSTS, AND REVENUE (Dollars per racquet) 100 90 80 70 60 50 40 30 20 10 MC 0 0 LRAC MR D 10 20 30 40 50 60 70 80 QUANTITY (Thousands of racquets per month) 90 100 Monopolistic Competition Outcome Perfect Competition Outcome ?
(12) Suppose all firms in a monopolistically competitive industry were merged into one large firm. Would that new firm produce as many different brands? Would it produce only a single brand? Explain.
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Question 26 If firms in a competitive price-searcher (monopolistic competitive) market are currently earning economic losses, then in the long run, new firms will enter the market, and the current firms will experience a decrease in demand for their products until zero economic profit is again restored. new firms will enter the market, and the current firms will experience an increase in demand for their products until zero economic profit is again restored. some existing firms will exit the market, and the remaining firms will experience an increase in demand for their products until zero economic profit is again restored. some existing firms will exit the market, and the remaining firms will experience a decrease in demand for their products until zero economic profit is again restored.
3. Is monopolistic competition efficient? Suppose that a firm produces wooden train engines in a monopolistically competitive market. The following graph shows its demand curve, marginal- revenue (MR) curve, marginal-cost (MC) curve, and average-total-cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. ? PRICE (Dollars per engine) 100 90 80 70 60 50 40 30 20 10 MC ATC MR 0 + Demand H 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of engines) Mon Comp Outcome Min Unit Cost Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that optimal quantity for each firm. Furthermore, the quantity the firm produces in long-run equilibrium is True or False: This indicates…
Concept: Revenue of a Firm Farmer Jones grows oranges in Florida. Suppose the market for oranges is perfectly competitive and that the market price for a crate of oranges is $11 per crate. Fill in total revenue, average revenue, and marginal revenue in the table below. (Enter your responses as integers.) Average Marginal Revenue Crates of Market Price Total Revenue Revenue (per crate) $11 Oranges (TR) (AR) (MR) $ 1 11 $ $ 2 11 3 11 4 11 5 11
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Hayfever Farms is an 80-acre hay farm in Colorado. The owners are considering changing the farm's name to Blissful Acres and growing strawberries instead of hay. Use the table of marginal cost (MC) and marginal revenue (MR) to answer two questions. Number of acres MC $ MR $ (hay) MR $ (strawberries) 10 320 730 5600 20 200 730 5600 30 540 730 5600 40 730 730 5600 50 1200 730 5600 60 3200 730 5600 70 5600 730 5600 80 6700 730 5600 If they continue to only grow hay, how many acres should Hayfever Farms devote to growing hay in order to maximize profits? acres of hay: acres If the owners decide to only grow strawberries, how many acres should Blissful Acres devote to growing strawberries in order to maximize profits? acres of strawberries:
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J Copyright © McGraw-Hill Education. Permission is granted to reproduce for classroom use. NAME DATE CLASS Math Practice for Economics Comparing Prices among Competitors networks Background information: The candy industry in the United States could be defined as an oligopoly because just three companies make 99.4% of snack size chocolates. The big three companies are Hershey's, Mars, and Nestle. All three companies use much of the same ingredients, so how do they compete against one another? This is primarily done through price. Directions: The two tables below show what a snack size chocolate costs from the various candy makers, big and small. Read the table below. Then, answer the following questions using the information in the table. 110 ct bag $18.12 = 16 cents each Walmart Amazon Hershey's 215 ct. bag $13.88 = 6 cents each 100 ct. bag $12.81 = 13 cents each Mars 230 ct. bag $13.88 = 6 cents each Nestle 70 ct. bag $8.98 = 13 cents each 55 pc. Bag $17.96 = 33 cents each Candy…
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