QM = 140,000 -32,000P marker Quantity demanded. QF = 60,000+ 8,000P, where QM = market quantity demanded, and QF = the supply of the competitive fringe. Quantities are measured in gallons per week, and price is measured as a price per gallon. a. Determine the price and output that would prevail in the market under the condition described above. Identify output for the dominant firm as well as the competitive fringe b. Assume that the market demand curve shifts rightward by 40,000 units. Show that dominant firm is indeed a price leader. What output (leader and follower) and market il after the change in demand?

QM = 140,000 -32,000P marker Quantity demanded. QF = 60,000+ 8,000P, where QM = market quantity demanded, and QF = the supply of the competitive fringe. Quantities are measured in gallons per week, and price is measured as a price per gallon. a. Determine the price and output that would prevail in the market under the condition described above. Identify output for the dominant firm as well as the competitive fringe b. Assume that the market demand curve shifts rightward by 40,000 units. Show that dominant firm is indeed a price leader. What output (leader and follower) and market il after the change in demand?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Price is set in a market by a dominant firm price leader (L = Leader). Total Market Demand is P = 10,000-5*QT.QT= 2,000 - .20*P.The dominant firm’s total cost is TCL= 50*QL + 1.5*QL2. The dominant firm’s Quantity Demanded is QL= QT – QF. The competitive fringe supply isSF= PL = 50 + 2QF;QF = -25 + .5*P. The fringe firms’ output is?
Exercise 1: Stackelberg model Suppose there are two firms, Firm 1 and Firm 2. Both firms have the same production cost and they face the industry demand given below. Demand: P = 500 - Q Costs: MC = ATC = 200 Suppose Firm 1 is the incumbent and the first-mover. Its profit is equal to ________________. a.$14,000 b.$12,000 c.$11,250 d.$22,500 Continue with Exercise 1... If Firm 2 enters, its profit is equal to _________. a.$5,625 b.$6,000 c.$7,000 d.$11,250 Hi there, our teacher gave exercises before the final exam in 5 days. I have a hard time solving the Stackelberg model. Please help me out:)
Please help with the answers marked as incorrect with an x. If someone can help I will give a thumbs up! :)
Price is set in a market by a dominant firm price leader (L = Leader). Total Market Demand is P = 10,000-20*QT. The dominant firm price leader’s (L = Leader or Dominant Firm) total cost is TCL = 60*QL + 1.5*QL2. The competitive fringe supply (F = Fringe) is SF = PL = 100 + 2QF. Determine the quantity that will be produced and sold by the Dominant Firm. The Dominant Firm quantity =
4. Consider a market where every firm and every potential entrant has the iden- tical cost function C(q) = 3q³-6q² +6q. (a) Find the firm's inverse supply function. (b) Suppose the market demand function is given by QP (P) = 20-2P. Find the long-run equilibrium price, quantity, and the number of firms. (c) Suppose the demand function suddenly becomes perfectly inelastic at quan- tity Q = 7. Find the long-run equilibrium price, quantity and the number of firms. (d) Suppose the demand becomes perfectly inelastic at quantity Q = 7, and the government decides to collect a per unit tax t = 4 from the producers for every unit of the good they sell. Find the long-run equilibrium price, quantity and the number of firms.
Problem 3 Squeak eClean produces commercial sanitizer used to clean tanker trucks that haul liquid food products such as milk. This sanitizer a commodity like any other and at the wholesale level, there are many domestic and foreign producers that compete vigorously. Suppose you have the following estimated market demand and supply functions for the sanitizer. Qd=248.08 +2.2Y – 0.6Pc+ 1.2 Ps − 4P Qs = 10 +2P In these equations, Q measures output in gallons per month (in 1,000's), P is the price per gallon of the sanitizer, Y is annual average household income (in 1,000's), Pc is an index of commodity prices, and Ps is the average price per gallon of other types of sanitizer. After gathering the latest data, you find that average household income is $36,400, the current level of the commodity price index is 110.6, and the average price per gallon of other types of sanitizers is $48.50. a. Find the current equilibrium price and quantity in this market. b. Find the equilibrium price and…
Producer surplus will be the same in a monopoly and in a competitive market if aggregate demand and cost functions are identical in both markets. (a) True. (b) False.
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.
DuopolyMarket for mechanical pencils can be described by the following demand schedule:Price | Number of pencils demanded$6 | 80$5 | 200$4 | 320$3 | 440$2 | 560$1 | 680$0 | 800The fixed cost is $340, while the variable cost is $0.50.d) If there were two firms on the market and they agreed to cooperate, how much would eachfirm need to produce? Follow the procedure outlined in the lecture and show that the otherfirm would prefer to deviate from the agreement.e) When the firms deviate from the agreement, there is a new optimal level of output. Showwhether the firms have an incentive to deviate from that level?f) If there were two firms on the market, what would be the price and the quantity of pencilstraded if the firms couldn’t cooperate?
a and b
There are two gas stations in a small isolated town. The market demand for gasoline is given by P=8-0.25xQ, where Q is the quantity of gas in thousands of gallons and Pis the price of gas in dollars per gallon. Each station can supply any quantity of gasoline at a constant marginal cost of $1 per gallon. There are no fixed costs. Both stations sell the same regular gas, and the differences in location, service, etc. don't matter to consumers.
Refer to the figure above. The competitive market player will have $____ of profits. A)0 B)100 C)1800 D)4050