Question #1 (Imperfect Competition and Perfect Competition. Suppose that the (inverse) demand curve for Ginseng is given by P = 16 - 4Q and TC =2+ $2Q² = a. What are four conditions required for a competitive market? 4 Points b. What is equilibrium Quantity and Profit if the market is competitive and P = $12? (note that you are given the price in this example and should not use the inverse demand curve for this question. Also this question may produce a question that is not a whole number—show three decimal points) 5 Points c. What is equilibrium Price and Quantity and Profit if there are monopoly in the market (note Q = Q and use the demand equation given)—this answer may not be a round number—use three decimal points? 6 Points d. If you had a duopoly, how would the equilibrium Price and Quantity and Profit differ from the competitive market and a monopoly market (note Q = q₁ + q and q₁ = q₁)? This question does not require a calculation- -to state it more clearly, this does not require any mathematics—you can explain the outcome. However, you need to answer this for both the competitive market and the monopoly and its difference from the duopoly. 5 Points
Question #1 (Imperfect Competition and Perfect Competition. Suppose that the (inverse) demand curve for Ginseng is given by P = 16 - 4Q and TC =2+ $2Q² = a. What are four conditions required for a competitive market? 4 Points b. What is equilibrium Quantity and Profit if the market is competitive and P = $12? (note that you are given the price in this example and should not use the inverse demand curve for this question. Also this question may produce a question that is not a whole number—show three decimal points) 5 Points c. What is equilibrium Price and Quantity and Profit if there are monopoly in the market (note Q = Q and use the demand equation given)—this answer may not be a round number—use three decimal points? 6 Points d. If you had a duopoly, how would the equilibrium Price and Quantity and Profit differ from the competitive market and a monopoly market (note Q = q₁ + q and q₁ = q₁)? This question does not require a calculation- -to state it more clearly, this does not require any mathematics—you can explain the outcome. However, you need to answer this for both the competitive market and the monopoly and its difference from the duopoly. 5 Points
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Question #1 (Imperfect Competition and Perfect Competition.
Suppose that the (inverse) demand curve for Ginseng is given by P
= 16 - 4Q and TC =2+ $2Q²
=
a. What are four conditions required for a competitive market? 4
Points
b. What is equilibrium Quantity and Profit if the market is
competitive and P = $12? (note that you are given the price in
this example and should not use the inverse demand curve for
this question. Also this question may produce a question that
is not a whole number—show three decimal points) 5 Points
c. What is equilibrium Price and Quantity and Profit if there are
monopoly in the market (note Q = Q and use the demand
equation given)—this answer may not be a round number—use
three decimal points? 6 Points
d. If you had a duopoly, how would the equilibrium Price and
Quantity and Profit differ from the competitive market and a
monopoly market (note Q = q₁ + q and q₁ = q₁)? This question
does not require a calculation- -to state it more clearly, this
does not require any mathematics—you can explain the
outcome. However, you need to answer this for both the
competitive market and the monopoly and its difference from
the duopoly. 5 Points
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