Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 18, Problem 3SPPA
To determine
To compute:
The quantity, price of rides and economic profit of Mr. A and Mr. Z. Whether Mr. A and Mr. Z have a motivation to collude and raise their price.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
a.
b.
C.
d.
Price
panel a
panel b
panel c
panel di
Price
(a)
(c)
MA
MC
MR
ATC
Quantity
MC
ATC
D
Quantity
Price
Price
(b)
MR
(d)
MC
Quantity
MC
مما
ATC
Refer to Figure 3. Assume a monopolistic competitive environment: From the 4 graphs depicted, which one of them represents a
short-run equilibrium that encourages the entry of other firms?
ATC
Quantity
D
You decide to create a burger restaurant named BurgerDeals to help pay for college fees. The table below contains total pricing information for your single product, large extra-cheese burger. Your town's burger market is fiercely competitive, with big extra-cheese burger selling for $7 on average. Fill in the blanks in the table and answer the following questions
Which of the following is true regarding monopolistic competition?
Ⓒa. Each firm behaves as a monopolist, but makes no profits in the long run due to competition from close substitutes
b. Save your money, and only purchase the railroads and high-end properties on the board (i.e. red, yellow, green, and blue)
c. There is no such thing as monopolistic competition, it is an oxymoron
d. Firms behave competitively, but they make profits in the long run because there are some barriers preventing entrepreneurs from entering
the market
Chapter 18 Solutions
Foundations of Economics (8th Edition)
Ch. 18 - Prob. 1SPPACh. 18 - Prob. 2SPPACh. 18 - Prob. 3SPPACh. 18 - Prob. 4SPPACh. 18 - Prob. 5SPPACh. 18 - Prob. 6SPPACh. 18 - Prob. 7SPPACh. 18 - Prob. 8SPPACh. 18 - Prob. 1IAPACh. 18 - Prob. 2IAPA
Ch. 18 - Prob. 3IAPACh. 18 - Prob. 4IAPACh. 18 - Use this information to work Problems 5 to 7. DOJ...Ch. 18 - Use this information to work Problems 5 to 7. DOJ...Ch. 18 - Prob. 7IAPACh. 18 - Which of the following statements is incorrect. In...Ch. 18 - If firms in oligopoly form a cartel, it will...Ch. 18 - Prob. 3MCQCh. 18 - Prob. 4MCQCh. 18 - Prob. 5MCQCh. 18 - Prob. 6MCQCh. 18 - Prob. 7MCQ
Knowledge Booster
Similar questions
- Solve the attachmentarrow_forwardQ.6. Larry, Curly, and Moe run the only saloon in town. Larry wants to sell as many drinks as possible without losing money. Curly wants the saloon to bring in as much revenue as possible. Moe wants to make the largest possible profits. Using a single diagram of the saloon's demand curve and its cost curves, show the price and quantity combinations favored by each of the three partners. Explain.arrow_forward1. If Sam and Jack each produce the same quantity of appointments as would be produced in perfect competition, the total quantity of appointments is ___ the price per lesson would be ____ , and the economic profit of Sam and Jack would be____? 2. If Sam and Jack form a cartel and produce the same quantity of appointments as would be produced in a monopoly, the total quantity of appointments would be ____, the price per appointment is ____ and the economic profit of Sam and Jack is ____? 3. Would Sam and Jack have an incentive to break the cartel agreement and lower their price to increase the number of tennis lesson appointments?arrow_forward
- Suppose 2 gas stations must post their prices for regular gasoline at 6am each morning and cannot change their price during the day. Each gas station has a choice: charge a relatively “low” price or charge a relatively “high” price. The following shows their profit for the day of each gas station depending upon which price each gas station chooses: Gas Station B Low Price High Price Gas Station A Low Price $2000, $900 $500, $1500 High Price $1200, $1800 $300, $2100 Assume that this is a "one shot" game: Which strategy should Gas Station A choose? Is it a dominant strategy? Explain why or why not. Which strategy should Gas Station B choose? Is it a dominant strategy? Explain why or why not What is the outcome for each Gas Station? How much profits will each Gas Station earn? Explain. Does this game represent a prisoner’s dilemma situation? Why or why not? If the gas stations can talk the night before making their pricing decision and discuss their pricing…arrow_forwardThe following graph depicts the costs incurred by a Local egg seller, Rahim. Rahim is faced with strong competitors who are selling exactly the same product. Use the graph to answer the following questions- Price/Cost per egg MC 12 ATC 8 MR3 AVC 6. MR2 MR1 Quantity 100 200 300 400 a)At what price will Rahim try to minimize loss by selling eggs in the market? b)At what price will there be a break-even point?arrow_forwardIlia is driving home from work. She needs to buy gas and notices an Exxon-Mobil station on one side of the street and a Shell station on the other side of the street. Although run by different companies, the two stations sell gasoline at the same price. a. The most likely reason that the price is the same is that _gas stations always make a profit, so they can charge any price they want. _drivers need gas and are willing to pay whatever price a gas station charges. _government regulation requires both gas stations to charge the same price. _consumers view gasoline from different gas stations as perfect substitutes. b. If one station increases its price, _it will be fined by the government. _it will sell more gasoline. _it will make a higher profit. _it will lose customers to the cheaper station across the street.arrow_forward
- In which of the following situations would Maria's Doughnut Shop have the MOST market power? Select one: a. The closest doughnut shop or bakery is 25 miles away from Maria's shop. b. There are two rival doughnut shops within three miles but no other bakeries. c. The closest doughnut shop is 10 miles away, but there is a bakery with breakfast pastries two miles away. d. Within three miles, there are five other doughnut shops and three bakeries that sell breakfast pastries.arrow_forwardnot use ai pleasearrow_forwardA 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?arrow_forward
- The graph below is for Chic and Sharpe Ltd., a firm in the women’s garment industry, which is monopolistically competitive. a. Label the four curves in the graph above. Double-click on each of the question marks on the graph and select the correct label. b. What is the profit-maximizing output and price? Output: units Price: $ c. At the output in (b), what are the amounts of Total cost: $ ; Total revenue: $ Economic profit: $ d. How much excess capacity exists? units e. What will the presence of economic profits do? i) Result in the entry of new firms into the industry ii) Have no effect on the number of firms in the industry iii) Result in the exit of firms from the industry f. As a result of your answer to (e), the demand curve in the above graph will i) shift to the right ii) shift to the left iii) not shiftarrow_forwardEconomicsarrow_forwardHand written solutions are strictly prohibitedarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning