17.The firm Durham Co. operates in a competitive market becauseODurham Co. is one of a few firms and sells a product different from other firms in the marketODurham Co. can influence the market price and entry/exit from the market is easyODurham Co. is one of many firms selling the same product and, is a price takerODurham Co. is one of a few firms selling the same product and, market entry is blocked 18.The firm Wright Co. is facing losses, and needs to decide whether to shut down or keep producing. Determine which of the following scenarios should lead to the decisions to keep producing.Orevenue are lower than fixed costOthe market price or marginal revnue is greater than the minimum average variable costOthe market price is greater than the total fixed cost

In competitive market, there are large number of firms in the market

The firm Durham Co. operates in a competitive market because ODurham Co. is one of a few firms and sells a product different from other firms in the market ODurham Co. can influence the market price and entry/exit from the market is easy ODurham Co. is one of many firms selling the same product and, is a price taker ODurham Co. is one of a few firms selling the same product and, market entry is blocked

The firm Durham Co. operates in a competitive market because ODurham Co. is one of a few firms and sells a product different from other firms in the market ODurham Co. can influence the market price and entry/exit from the market is easy ODurham Co. is one of many firms selling the same product and, is a price taker ODurham Co. is one of a few firms selling the same product and, market entry is blocked

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Monopolistic Competition

Section: Chapter Questions

Problem 8PA

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Figure 16-10 The figure is drawn for a monopolistically-competitive firm. 160 140 123.33 90 QUESTION 1 56.67 Price 100 133.33 154.92 MR MC ATC Demand Refer to Figure 16-10. As the figure is drawn, the firm is in a. neither a short-run equilibrium nor a long-run equilibrium. b. a long-run equilibrium but it is not in a short-run equilibrium. c. a short-run equilibrium but it is not in a long-run equilibrium. d. a short-run equilibrium as well as a long-run equilibrium. Quantity
18.
Price, cost, revenue $100 $90 $80 $70 $60 $50 0 000 MR MC D /AC 0 7000 14000 21000 12000 Dresses per year Refer to the graph shown of a monopolistically competitive firm. In the long run: marginal cost will fall for firms that remain as other firms exit the industry. demand will fall for firms that remain as other firms enter the industry. Odemand will rise for firms that remain as other firms exit the industry. O average total cost will rise for firms that remain as other firms enter the industry.
Uncertain if what I have is correct
Demand Schedule Assume MC = 0 Price Quantity $24 0 $22 1 $20 2 $18 3 $16 4 $14 5 $12 6 $10 7 $8 8 $6 9 $4 10 $2 11 $0 12 1. If the market is perfectly competitive, what will the market equilibrium price and quantity be in the long-term? Explain how you arrived at that answer. 2. If the market is a duopoly and the firms collude to maximize joint profits, what will market price and quantity be? Explain how you arrived at that answer. 3. If the market is a duopoly and the firms collude to maximize joint profits, what is each firm's total revenue if the firm split the market equally? Explain how you calculated that answer.
Table 17-9Only two firms, Acme and Pinnacle, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost. Price Quantity Total Revenues 70 0 0 65 100 6500 60 200 12000 55 300 16500 50 400 20000 45 500 22500 40 600 24000 35 700 24500 30 800 24000 25 900 22500 20 1000 20000 15 1100 16500 10 1200 12000 5 1300 6500 0 1400 0 Refer to Table 17-9. If Acme and Pinnacle operate to jointly maximize profits and agree to share the profit equally, then how much profit will each of them earn? Group of answer choices $9,000 $8,750 $8,000 $6,750
Table 17-9Only two firms, Acme and Pinnacle, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost. Price Quantity Total Revenues 70 0 0 65 100 6500 60 200 12000 55 300 16500 50 400 20000 45 500 22500 40 600 24000 35 700 24500 30 800 24000 25 900 22500 20 1000 20000 15 1100 16500 10 1200 12000 5 1300 6500 0 1400 0 Refer to Table 17-9. How much less do each of these firms earn in the Nash equilibrium than if they jointly maximize profits? Group of answer choices $250 $500 $750 $1000
Table 17-9Only two firms, Acme and Pinnacle, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost. Price Quantity Total Revenues 70 0 0 65 100 6500 60 200 12000 55 300 16500 50 400 20000 45 500 22500 40 600 24000 35 700 24500 30 800 24000 25 900 22500 20 1000 20000 15 1100 16500 10 1200 12000 5 1300 6500 0 1400 0 Refer to Table 17-9. If Acme and Pinnacle operate to jointly maximize profits, then what is the price? Group of answer choices $45 $40 $35 $30
2. Consider an industry with two firms 1 and 2, each having marginal cost equal to zero. The industry demand is P(Y) = 60 – Y, where Y = y, + y2 is total output. a. What are the competitive equilibrium output and price of the market? b. Draw the demand schedule given output equals to 0, 10, 20, 30, 40, 50, 60, and indicate the corresponding profits. What are the monopolistic output and price if there is only one firm? If there are two firms who collude with each other to decide their quantities, what are the output quantities of two firms? c. If the two firms decide their quantities independently and simultaneously, use game theory to show if they have incentive to increase their quantities by 5 units than the above level. If so, do they have incentive to increase their quantities by 5 units further?
12. Consider a duopoly market. Two firms are selling identical products and all costs are assumed to be zero for simplicity. Market demand schedule is given in the following table. Note that firms always choose an integer value for the quantity of production. Quantity Price Total Profit 3 $12 4 11 5 8 6 6. 7 4 8 2 1 10 a. Fill in the column of total profit.
Refer to Figure K.. If there were four identical firms in this competitive industry, which of the following price-quantity combinations would be on the market supply curve? Point A B C D (A) A and C only B) Bonly C) B and D only D) A only Price (Dollars) 4 4 Quantity (Units) 16 32 32 6 6 8 64 64
A perfectly competitive firm is onsidered to be more generous in terms of price and quantity of output in comparison to firm belonged to monopoly and monopolistic markets. C. If firms incurring loss in this market begin to exit the market, what will happen to the market equilibrium? Demonstrate your answer using a simplified graph. d. The firm wishes to supply output more than the quantity determined under the equilibrium condition, is it worth to pursue?