Is announcing first an advantage or a disadvantage? Explain briefly.It is an advantage to moveⒸA. second because profit when moving second is higher than profit when moving first.O B. first because cost when moving first is lower than the cost when moving second.O C. first because the price when moving first is higher than the price when moving second.O D. first because profit when moving first is higher than profit when moving second.O E. second because the firm that moves second produces more output.How much would you pay for the option of announcing either first or second?You would be willing to pay for the option of moving first instead of second.Suppose instead that you are to play the first round of a series of 10 rounds (with the same competitor). In each round, you and your competitor announce your output at the same time. You want to maximize the sum of your profits over the 10 rounds. How much will youproduce in the first round? How much do you produce in the tenth round? In the ninth round? Explain briefly.If you play a series of 10 rounds of this game with the same competitor, then you shouldO A. produce 12.00 units of output in each round because collusion is not possible in finite games.O B.produce 8.00 units of output in each round because collusion is not possible in finite games.O C.produce 6.00 units of output in the first round and 8.00 units of output in the last nine rounds because collusion is only possible in the first period.O D. produce 6.00 units of output in each round because collusion is not possible in finite games.O E. produce 6.00 units of output in each of the first nine rounds and 8.00 units of output in the tenth round because collusion is not possible in the last period.Once again you will play a series of 10 rounds. This time, however, in each round your competitor will announce its output before you announce yours. How will your answers change?If you play a series of 10 rounds of this game with your competitor moving first, then you shouldO A. behave irrationally by producing 12.00 units after your competitor produces 12.00 units until both you and your competitor instead produce 8.00 units of output.O B. behave irrationally by producing 8.00 units after your competitor produces 12.00 units until both you and your competitor instead produce 8.00 units of output.O C. produce 12.00 units of output in each period and your competitor should produce 6.00 units of output in each period.O D. produce 6.00 units of output in each period and your competitor should produce 12.00 units of output in each period.O E. produce 6.00 units of output in each period and your competitor should produce 8.00 units of output in each period. You are a duopolist producer of a homogeneous good. Both you and your competitor have zero marginal costs. The market demand curve isP=24-Qwhere Q=Q₁ +Q₂. Q₁ is your output and Q₂ is your competitor's output. Your competitor has also read this book.Total revenue (TR) for your firm will beand total revenue for your competitor's firm will beIn turn, marginal revenue (MR) for your firm will beand marginal revenue for your competitor's firm will beTR₁ = (24-Q₁-Q₂)Q₁minusTR₂ = (24-Q₁-Q₂) Q₂.MR₁ = 24-2Q₁-Q₂MR₂ = 24-Q₁-2Q₂-Suppose you will play this game only once. If you and your competitor must announce your outputs at the same time, how much will you choose to produce? (Enter all numeric responses rounded to two decimal places.)You will produce units of output.What do you expect your profit to be? Explain.Profit will be $, fromSuppose you are told that you must announce your output before your competitor does. How much will you produce in this case, and how much do you think your competitor will produce?You will produce units of output and your competitor will produce units of output.What do you expect your profit to be?Profit for your firm should be $

P=24-QQ=q1+q2MC=0Thank you for the question. As per Bartleby's guidelines, we can solve 3 subparts…

Answered: You are a duopolist producer of a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the case of a monopolist who has the ability to perfectly price discriminate by charging each one of its customers a two-part tariff. Suppose for simplicity that there are only two consumers, Mary and Terry. Mary demand for the good is 2/3 of the aggregate demand. The aggregate demand is given by Q=550-3p, where Q denotes the total quantity demanded at price p. The firm's total cost of producing Q units is given by the function C(Q) = 5 Q + 100 Find the two-part tariff that the firm will charge Mary in order to maximize its profit. Then enter the fee of this two-part tariff below. (As usual, you must enter a number below, not a ratio, not an expression with symbols..., just a number.)
The demand function in a duopoly market is P(Q) = 300-0.3Q, where P is the price and Q is the total quantity demanded. Both companies have the same constant marginal cost, What is the deadweight loss if both companies maximize their profits and they are not allowed to cooperate? (MR is not MC since its not monopoly)
The following graph shows the demand (D) for cable services in the imaginary town of Utilityburg. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local cable company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. Which of the following statements are true about this natural monopoly? Check all that apply. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. The cable company is experiencing economies of scale. The cable company must own a scarce resource. The cable company is experiencing diseconomies of scale. True or False: Without government regulation, natural monopolies never earn zero profit in the long run. True False
Assume that two companies (A and B) are duopolists who produce identical products. Demand for the products is given by the following linear demand function: P=200− Q A − Q B where Q A and Q B are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TC A =1,500+55 Q A + Q A 2 TC B =1,200+20 Q B +2 Q B 2 Assume that the firms form a cartel to act as a monopolist and maximize total industry profits (sum of Firm A and Firm B profits). In such a case, Company A will produce units and sell at . Similarly, Company B will produce units and sell at . At the optimum output levels, Company A earns total profits of and Company B earns total profits of . Therefore, the total industry profits are . At the optimum output levels, the marginal cost of Company A is and the marginal cost of Company B is . The following table shows the long-run equilibrium if the firms act independently, as in the Cournot model…
There are two types of consumers: one half of consumers are type 1 (low type) and the other half are type 2 (high type). Type l's demand curve is q1 = 4 – P, while type 2's demand is given by q2 = 6 – P. Consider a monopolist selling its product to these consumers. Assume that the marginal cost is equal to zero. However, the firm does not know an individual consumer's type. It only knows that there are two types of consumers with demand curves given as above. Suppose that the firm can offer only a single two-part tariff, (T, P), where T is the lump-sum fee and P is the unit price. (1) T and P? Also, compute the resulting profit. If the firm serves only high type consumers, what should be the optimal two-part tariff, If the firm serves both types of consumers, what is the firm's profit when it offers (T, P)? (2) Find the expression in terms of P only. (3) well as the resulting profit. Compute P that maximizes the firm's profit in (2). Also, compute the optimal T, as (4) tariff will be…
Imagine any market divided by 2 Cournot oligopolists who have identical costs Marginal cost = Average cost = 200. About this market, ask yourself: a) If the demand curve for this market is given by Q = 1250 - 2.5P, where Q is the total quantity demanded in the market and P is the selling price, both given in units, what is the reaction curve of the oligopolists? b) What will be the quantity produced and the selling price of the oligopolists? c) A strategist considers that a good marketing campaign would be able to expand the Demand of this market to Q = 1,500 - 2.5P and that in this way, oligopolists could produce the same amount and make significantly greater profits. Such a campaign would generate a reduction in profits in the order of 70,000. Is it worth making this investment in marketing?
A monopolistic producer of two goods has a total cost function TC = 5Q1+10Q2 and a total revenue TR = 50Q1- Q12 – 2Q2Q1+100Q2– 4Q2² i) Calculate the values of Q1 and Q2 will yield a maximum profit ii) Using the Hessian, prove that the firm's profit is at a maximum.
Consider any market that has an inverted demand curve given by P = 200-0.6Qd, where P is the market price and Qd is the quantity demanded. Whatever the market structure, it is known that the production of this good takes place through Cmg = CVme= $80.00. Consider that the production of this market can be done by a monopolist company or by two duopolists. If it is a duopoly, the companies will organize themselves as a Stackelberg duopoly and will each have a fixed cost of $1,500.00. If it is a monopoly, this company will have a lot of expenses with licenses with the government, as it is the only one to explore the resource. In this way, your fixed costs would reach $5,000.00. Given this information, evaluate the best balance for this market, from the point of view of consumers.
• Consider demand p (Q) = 180 - 20, constant MC = 60. Draw the graph of monopoly two-block pricing and solve the optimal prices and quantities (p1, 21) and (p2, 22).
Consider two groups of consumers. In the first group, each consumer has the inverse demand function P = 50 – Q. In the second group, each consumer has the inverse demand function P = 30 – Q. There are 10 consumers in each group, or 20 consumers in all. Marginal cost is always zero. The monopolist wants to maximize profits by designing a two-part tariff that will apply to both groups. (1) After paying the tariff, how much consumer surplus remains to a member of Group I? Of Group II? (2) Suppose that Q is a normal good. Compare the consumer surplus remaining for a member of Group I to the surplus remaining for a member of Group II. How might two-part tariffs affect the equality of the income distribution?
a monopolist knows that there are 2 types of consumers, "high demand" and "low demand" types. Inverse demand for low is p=150-qL and p=200-qH . 70% of consumers are the L type. MC =0. a) find the optinal price if the firm can only set one price. b) explain how a firm can set a fee for purchasing any amount and why it is better than single price strategy.
If this monopolistic firm's marginal cost is constant at $30, its profit maximizing output is: (Hint: Demand is linear (P-a-bQ) implying that the MR curve's slope is twice the demand curve slope; find the demand curve and then the MR curve.) Price $70 $50 $30 $10 10 20 30 40 50 units. 40 units. 20 units. 30 units. Demand 50 60 70 Quantity

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