Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 17, Problem 2QCMC
To determine
Oligopoly market and cartel.
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QUESTION 4
Suppose a stream is discovered whose water has remarkable healing powers. You decide to bottle the liquid and sell it. The market demand
curve is linear and is given as follows: P = 53 - Q. The marginal cost to produce this new drink is $5.
What price would this new drink sell for if the market was a Stackelberg duopoly?
A. $17
В. $21
C. $29
D. $16.50
What is the market structure that best suits the above firm?
PRICE (Dollars)
22
10
10
ATC
20 30 40 60 60 70 80 90 100
QUANTITY (Units)
a. Perfect competition
b. Natural monopoly
c. Oligopoly
d. None of the above.
Question 1
Chapter 17 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
Ch. 17.1 - Prob. 1QQCh. 17.2 - Prob. 2QQCh. 17.3 - Prob. 3QQCh. 17 - Prob. 1QRCh. 17 - Prob. 2QRCh. 17 - Prob. 3QRCh. 17 - Prob. 4QRCh. 17 - Prob. 5QRCh. 17 - Prob. 6QRCh. 17 - Prob. 7QR
Ch. 17 - Prob. 1QCMCCh. 17 - Prob. 2QCMCCh. 17 - Prob. 3QCMCCh. 17 - Prob. 4QCMCCh. 17 - Prob. 5QCMCCh. 17 - Prob. 6QCMCCh. 17 - Prob. 1PACh. 17 - Prob. 2PACh. 17 - Prob. 3PACh. 17 - Prob. 4PACh. 17 - Prob. 5PACh. 17 - Prob. 6PACh. 17 - A case study in the chapter describes a phone...Ch. 17 - Prob. 8PACh. 17 - Prob. 9PA
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- Describe the various types of market structures (perfect competition, monopoly, oligopoly, monopolistic competition) and their characteristics..arrow_forwardWhat is the primary difference between oligopolistic "coopetition" and cartel behavior? Group of answer choices A. Oligopolistic firms work together to set prices and cartels do not B. One firm has most of the power in oligopolistic coopetition, while cartels share power C. One firm has most of the power in a cartel, while oligopolistic firms share power D. Cartels work together to set prices and oligopolistic firms do notarrow_forwardA firm is operating in the United States with only two other competitors in the industry. a. It is likely this industry would be characterized as: multiple choice 1 perfectly competitive. pure monopoly. monopolistically competitive. oligopoly. b. Firms in this industry will likely earn: multiple choice 2 an economic loss. an economic profit. a normal profit. c. If foreign firms begin supplying the product, increasing the number of competitors, it is likely that: multiple choice 3 economic profits will increase. economic losses will become smaller. economic profits will fall. normal profits will increase.arrow_forward
- Macmillan Learning Increasing Returns to Scale and Monopolistic Competition Starting from the long-run trade equilibrium in the monopolistic competition model, as illustrated in the accompanying figure, consider what happens when industry demand D increases. For instance, suppose that this is the market for cars, and lower gasoline prices generate higher demand D. a. Show the resulting shift in the D/NT, d, and mr curves. Assume the price increases to $13. Place point A on the new short-run equilibrium. Price 09876 20 19 18 17 16 15 11 10 9 8 7 6 5 4 3 2 1 0 mr D/NT d A • AC MC 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantityarrow_forwardWhich of the following would most likely create the setting for an Oligopoly ? A. The government grants T'Challa and Nakia a patent for their respective vibranium-based electric car batteries. B. Market Demand is two or more times less than the quantity needed to produce at the minimum of the Average Cost Curve. C. Market Demand is two or more times greater than the quantity needed to produce at the minimum of the Marginal Cost Curve. D. Insumountable technological difficulty associated with producing similar products serves as an effective Barrier to Entry. E. All of the Abovearrow_forwardWHAT IS THE DIFFERENCE BETWEEN MONOPOLY AND OLIGOPOLY? PROVIDE EXAMPLES. WHAT IS A MONOPOLISTIC COMPETITION? PROVIDE EXAMPLE. WHAT IS A PERFECT COMPETITION? PROVIDE EXAMPLE SITUATIONSarrow_forward
- An industry comprised of a small number of firms, each of which considers the potential reactions of its rivals in making price-output decisions is called: a. monopoly. b. monopolistic competition. c. perfect competition. d. oligopoly.arrow_forwardExplain what market inefficiencies derive from monopolies and monopolistic competition. Use examples How do firms in an oligopolistic market set their prices? Use specific examples Explain how firms that compete in the four different market structures determine profitability. Use specific examplesarrow_forwardCan you do a & b pleasearrow_forward
- Please do c & d thanksarrow_forwardCompare and contrast the way that monopolistic competitors set price with the way that perfectly competitive firms set price. Also, compare and contrast the short and long run equilibrium in perfect competition and monopolistic competition.arrow_forwardThere are four main forms of market, namely pure competitive market, monopolistic competition market, and marketoligopoly, and the monopoly market. These four forms of market can be viewed from the seller's point of view or in terms ofbuyer. Explain the difference between Pure Competition and Pure Monopoly Market!arrow_forward
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