Suppose that two firms, X and Y, face thefollowing abatement costs:MACX = 1.2Ax,MACY = 0.3AYTACX = 0.6AX20.15AY?TACY=Further assume that the combinedabatement standard is 40 units forboth firms.Use this model to answer Question 1, 2and 3Based on this model, if the government usesa uniform standardA. the total abatement cost for firm X is $24B. the total abatement cost for firm Y is $12C. the combined total abatement cost for bothfirms is $1,200D. the combined total abatement cost for bothfirms is $300According to this model, if the governmentuses a uniform standardA. firm Y would face a marginal abatement costthat is higher than that for firm YB. that standard would achieve a cost-effectivesolutionC. firm Y should do more of the abating and firmX should do less to move closer to a cost-effective solutionD. firm X's marginal abatement cost would be$48, and firm Y's marginal abatement costwould be $12Based on the model given, the cost-effectivesolution would arise ifA. each firm abates 20 units of pollutionB. firm X abates 8 units, and firm Y abates 32unitsC. firm Y does all the abating because its MAC islowerD. firm X abates 24 units, and firm Y abates 16units

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Compare the three alternative global pricingstrategies.
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1) a) Solve the following inequalities:(i) 5(11 − ?) < ? + 49 (ii) 7? − 3 <10m + 23< 8 − 5m (iii) ?2 ≥ 15 − 2? b) The cost structure for iPhones are as follows, fixed cost of $25 and variable cost perunit of $2. The associated demand function isp = 20 − q .(i) Obtain an expression for the profit, π(q). (ii) Find the range of output which gives a profit of at least $31. c) Use Microsoft Word or Excel to solve the system of linear inequalities:r + 5t ≤ 57t – 2r ≤ 4 r ≥ 0(NB: clearly identify the solution set by placing a BIG enough ‘S’ to coverthat entire region).
Marryweather Ltd. is a company that sells machines in the US and the EU. The inverse demand functions for the two markets are given as Pus = 10 – Yus and pgu = 6 - Yev. respectively. The machines for both markets are manufactured in Poland with a fixed % marginal cost of $2 and sold to clients only through its online retail stores (assume the online stores are affiliates of the company and that the profits are directly recorded by Marryweather, Ltd.). Due to its unique patented technology, the company is a monopoly in both markets. 1. Assume, instead of the exclusive territorial agreements, Marryweather, Ltd. has one global retail agreement with its online vendor that sells to both markets. Drawing a diagram (with the proper labels) show the combined market demand and marginal revenue. What is the price? What is the total profit? How many machines does the company sell in each market? 2. If Marryweather, Ltd. could perfectly price discriminate in the combined market from part (b), what…
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Marryweather Ltd. is a company that sells machines in the US and the EU. The inverse Pus = 10 – Yus and pgu = 6 – YEu, demand functions for the two markets are given as respectively. The machines for both markets are manufactured in Poland with a fixed % marginal cost of $2 and sold to clients only through its online retail stores (assume the online stores are affiliates of the company and that the profits are directly recorded by Marryweather, Ltd.). Due to its unique patented technology, the company is a monopoly in both markets. 1. Assuming Marryweather, Ltd. has an exclusive territorial online retail agreement in each market with its vendors (an online vendor in the US cannot sell to an address in Europe, and vice versa), what would be the profit-maximizing prices and quantities in the US and the EU? What are the profits from each market? 2. Assume, instead of the exclusive territorial agreements, Marryweather, Ltd. has one global retail agreement with its online vendor that sells…

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Suppose that two firms, X and Y, face the following abatement costs: МАСх3D 1.2Aҳ, TACX = 0.6AX2 0.15AY2 МАСу3D 0.3Аү TACY= Further assume that the combined abatement standard is 40 units for