Which of the following is correct? Imagine a small town in a remote area where only two residents, Maria and Miguel, owndairies that produce milk that is safe to drink. Each week Maria and Miguel worktogether to decide how many gallons of milk to produce. They bring milk to town andsell it at whatever price the market will bear. To keep things simple, suppose that Mariaand Miguel can produce as much milk as they want without cost so that the marginal costis zero. The weekly town demand schedule and total revenue schedule for milk is shownin the table below:Total RevenueQuantity(in gallons)Price(and Total Profit)$24$01$22$222$20$403$18$544$16$64$14$706$12$727$10$708$8$649$6$5410$4$4011$2$2212SO$0Refer to the table. Suppose the town enacts new antitrust laws that prohibit Maria andMiguel from operating as a monopoly. Which of the following is correct?Maria and Miguel each sell 3 gallons of milk at the price of $12 per gallon once theyreach a Nash equilibrium.Maria and Miguel each sell 4 gallons of milk at the price of $8 per gallon once theyreach a Nash equilibrium.Maria and Miguel sell 8 gallons of milk at the price of $0 per gallon once they reach aNash equilibrium.Maria and Miguel sell 6 gallons of milk at the price of $12 per gallon once they reacha Nash equilibrium.

When in a small town in a remote area where only two residents, Maria and Miguel , own dairies that…

Refer to the table. Suppose the town enacts new antitrust laws that prohibit Maria and Miguel from operating as a monopoly. Which of the following is correct? Maria and Miguel each sell 3 gallons of milk at the price of $12 per gallon once they reach a Nash equilibrium. Maria and Miguel each sell 4 gallons of milk at the price of $8 per gallon once they reach a Nash equilibrium. Maria and Miguel sell 8 gallons of milk at the price of $0 per gallon once they reach a Nash equilibrium. Maria and Miguel sell 6 gallons of milk at the price of $12 per gallon once they reach a Nash equilibrium.

Refer to the table. Suppose the town enacts new antitrust laws that prohibit Maria and Miguel from operating as a monopoly. Which of the following is correct? Maria and Miguel each sell 3 gallons of milk at the price of $12 per gallon once they reach a Nash equilibrium. Maria and Miguel each sell 4 gallons of milk at the price of $8 per gallon once they reach a Nash equilibrium. Maria and Miguel sell 8 gallons of milk at the price of $0 per gallon once they reach a Nash equilibrium. Maria and Miguel sell 6 gallons of milk at the price of $12 per gallon once they reach a Nash equilibrium.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 20P: May and Raj me the only two growers who provide organically grown corn to a local grocery store....

See similar textbooks

Related questions

Q: he graph depicts the average total cost (ATC) of a firm that mas decided to start advertising. The…

A: ***Since the new value of the ATC have not been provided, hence, the expert is required to solve…

Q: Draw a set of reaction curves that result in an unstable equilibrium.

A: Cournot duopoly is characterized by the presence of two firms and these firms competes on the basis…

Q: What is the answer? I did everyone as directed and I cannot find the answer correctly.

A: High-low cost estimation is a simple but useful method in economics, cost accounting and finance for…

Q: I can't see the answer for question 2.

A: Here we have to draw 2 new production possibility frontiers.Shift in Production Possibility Curve: A…

Q: Every time you go to your firm’s lounge to get a cup of coffee, the pot is empty. Why?

A: The Law of Demand states if price of a good increases/decreases, demand of the good…

Q: There are several hamburger shops around you. You are trying to find ways to make your hamburger…

A: A monopolistically competitive firm will look to differentiate its product from its competitors as…

Q: Starting a gluten free and nut free restaurant has been a lifelong dream of Sydney Quintero, since…

A: A payoff matrix is a way to show the output of players' choices in a game. A payoff matrix does not…

Q: During the late 1970s, the most popular form of music in the United States was disco. Sparked by the…

A: Monopolies are businesses that have complete control of a sector. As a cartel with a 100 percent…

Q: What are the three main virtues of the market system?

A: A market economy is a form of economic system in which supply and demand, rather than government…

Q: What's the answer I can't see it

A: Demand for good X with respect to good Y is cross-price elastic: With every 1% increase in the price…

Q: I had this as my solution and I was told that it was wrong.

A: Total Revenue:TR = P.QMarginal Revenue:MR = ΔTR / ΔQ (ΔTR) = change in total revenue (ΔQ) = change…

Q: Which of the following best describes why the Hours of Service Regulations were put into place? O To…

A: The driver test is important to ensure the safety of peope with having the all relevant information.…

Q: am almost positive my answer is right. Is it?

A: What large scale natural disaster may cause ? Large sacle natural disaster leads to reduced the…

Q: d) Another classmate cares more about good grades: She gets 50 units of happiness for a B and 80…

A: When both works hard then both get A and when one of them works hard then both get B. When neither…

Q: What defines market equilibrium? How about market disequilibrium? What are the contrasting…

A: Market equilibrium is attained when demand in market is equal to the supply in market. The…

Q: Which is most likely the result of healthy competition in the market?

A: Healthy market competition promotes good customer service, high-quality goods, and competitive…

Q: how buyers and sellers determine prices that are mutually beneficial

A: The market demand curve shows the greatest value that purchasers will pay to buy a given amount of…

Q: Online companies have transformed the way businesses find the best supplies t the best prices. True…

A: A company or an inventive entity engaged in commercial, industrial, or professional activity is…

Q: Chapter 1: Problem 20 Annie McCoy, a student at Tech, plans to open a hot dog stand inside Tech's…

A: Cost is the monetary payments that have to be made by the producer during the production process.…

Q: When Sasha's father speaks to her but she is distracted and looks around, he sometimes reaches out…

A: There are different kinds of toh which includes demand touch, friendship touch, social polite touch,…

Question

Which of the following is correct?

Imagine a small town in a remote area where only two residents, Maria and Miguel, own
dairies that produce milk that is safe to drink. Each week Maria and Miguel work
together to decide how many gallons of milk to produce. They bring milk to town and
sell it at whatever price the market will bear. To keep things simple, suppose that Maria
and Miguel can produce as much milk as they want without cost so that the marginal cost
is zero. The weekly town demand schedule and total revenue schedule for milk is shown
in the table below:
Total Revenue
Quantity
(in gallons)
Price
(and Total Profit)
$24
$0
1
$22
$22
2
$20
$40
3
$18
$54
4
$16
$64
$14
$70
6
$12
$72
7
$10
$70
8
$8
$64
9
$6
$54
10
$4
$40
11
$2
$22
12
SO
$0
Refer to the table. Suppose the town enacts new antitrust laws that prohibit Maria and
Miguel from operating as a monopoly. Which of the following is correct?
Maria and Miguel each sell 3 gallons of milk at the price of $12 per gallon once they
reach a Nash equilibrium.
Maria and Miguel each sell 4 gallons of milk at the price of $8 per gallon once they
reach a Nash equilibrium.
Maria and Miguel sell 8 gallons of milk at the price of $0 per gallon once they reach a
Nash equilibrium.
Maria and Miguel sell 6 gallons of milk at the price of $12 per gallon once they reach
a Nash equilibrium.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Answer

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Would you rather have efficiency or variety? That is, one opportunity cost of the variety of products we have is that each product costs more per unit than if there were only one kind of product of a given type, like shoes. Perhaps a better question is, What is the right amount of variety? Can there be too many varieties of shoes, for example?
Think back to a purchase that you made recently. How would you describe your thinking before you made that purchase?
Some years ago. two intercity bus companies, Greyhound Lines, Inc. and Trailways Transportation System, wanted to merge. One possible definition of the market for this case was the market for intercity bus service. Another possible definition was the market for intercity transportation, including personal cars, car rentals, passenger trains, and commuter air flights.' Which definition do you think the bus companies preferred, and why?
HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow HighFlyer Airlines to give passengers more comfort and sell more tickets at a higher price. However, redesigning the cabin means rethinking many other elements of the airplane as well, like engine and luggage placement, and the most efficient shape of the plane for moving through the air. HighFlyer Airlines has developed a list of possible methods to increase cabin space, along with estimates of how these approaches would affect the planes operating costs and ticket sales. Based on these estimates, Table 13.5 shows the value of R, how much should the firm invest in R on top of the private return; that is, an R private return to HighFlyer Airlines would have a 9 social return. How much investment is socially optimal at the 6 interest rate?
Aside from advertising, how can monopolistically competitive films increase demand for their products?
Compare the firms least-cost rule with how buyers allocate their consumption dollars.
If you were developing a product (like a web browser) for a market with significant barriers to entry, how would you try to get your product into the market successfully?
A firms marginal cost curve above the average variable cost curve is equal to the films individual supply curve. This means that every time a firm receives a price from the market it will be willing to supply the amount of output where the price equals marginal cost. What happens to the films individual supply curve if marginal costs increase?
When OPEC raised the price of oil dramatically in the mid-1970s, experts said it was unlikely that the cartel could stay together over the long term-that the incentives for individual members. to cheat would become too strong. More than fort),r years later, OPEC still exists. Why do you think OPEC has been able to beat the odds and continue to collude? Hint: You may wish to consider non-economic reasons.
Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?
What is the relationship between product differentiation and monopolistic competition?
What is productive efficiency? Allocative efficiency?