If a firm operates within an oligopoly and expl demand curve, increasing price will result in Multiple Choice moving to the elastic portion of the demand curve. moving to the inelastic portion of the demand curve. increasing the firm's profit. increasing the quantity of units demanded for the firm's good.

If a firm operates within an oligopoly and expl demand curve, increasing price will result in Multiple Choice moving to the elastic portion of the demand curve. moving to the inelastic portion of the demand curve. increasing the firm's profit. increasing the quantity of units demanded for the firm's good.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter23: Price-searcher Markets With Low Entry Barriers

Section: Chapter Questions

Problem 17CQ

See similar textbooks

Similar questions

A company produces a special new type of TV. The company has fixed costs of $498,000, and it costs $1300 to produce each TV. The company projects that if it charges a price of $2400 for the TV, it will be able to sell 700 TVs. If the company wants to sell 750 TVs, however, it must lower the price to $2100. Assume a linear demand What is the maximum profit that can be reached? It is $ (Round answer to nearest cent.)
Aidan and Celina are the only sellers of Jack Russell Terrier (JRT) inAntigua. Celina chooses her profit-maximizing number of JRTs to sell, q1, basedon the number of JRTs that she expects Aidan to sell. Aidan knows how Celinawill react and chooses the number of JRTs that she herself will sell, q2, aftertaking this information into account. The inverse demand function for JRTs isP(q1 + q2) = 2, 000 − 2(q1 + q2). It costs $400 to raise a JRT to sell. Explain in detail what type of competitors are Aidan and Celina?
Aidan and Celina are the only sellers of Jack Russell terrier (JRT) inAntigua. Celina chooses her profit-maximizing number of JRTs to sell, q1, basedon the number of JRTs that she expects Aidan to sell. Aidan knows how Celinawill react and chooses the number of JRTs that she herself will sell, q2, aftertaking this information into account. The inverse demand function for JRTs isP(q1 + q2) = 2, 000 − 2(q1 + q2). It costs $400 to raise a JRT to sell. If Celina expects Aidan to sell q2 JRTs ,what will her own marginal revenue be if she herself sells q1 JRTs?
At a price of $8 per unit, Gadgets Incorporated is willing to supply 19,000 gadgets, while United Gadgets is willing to supply 16,000 gadgets. If the price were to rise to $10 per unit, their respective quantities supplied would rise to 28,000 and 22,000. If these are the only two firms supplying gadgets, what is the elasticity of supply in the market for gadgets? Multiple Choice 1.59 1.4 2.22 0.63
Aidan and Celina are the only sellers of jack russell terrier (JRT) inAntigua. Celina chooses her profit maximizing number of JRTs to sell, q1, basedon the number of JRTs that she expects Aidan to sell. Aidan knows how Celinawill react and chooses the number of JRTs that she herself will sell, q2, aftertaking this information into account. The inverse demand function for JRTs isP(q1 + q2) = 2, 000 − 2(q1 + q2). It costs $400 to raise a JRT to sell.(a) Explain in detail what type of competitors are Aidan and Celina.(b) If Celina expects Aidan to sell q2 JRTs, what will her ownmarginal revenue be if she herself sells q1 JRTs?(c) What is Celina’s reaction function, R(q2)?(d) Now if Aidan sells q2 JRTs, what is the total number of JRTsthat will be sold?(e) What will be the market price as a function of q2 only?(f) What is Aidan’s marginal revenue as a function of q2 only?(g) How many JRTs will Aidan sell?(h) How many JRTs will Celina sell?(i) What will be the industry price?
Aidan and Celina are the only sellers of jack russell terrier (JRT) inAntigua. Celina chooses her profit maximizing number of JRTs to sell, q1, basedon the number of JRTs that she expects Aidan to sell. Aidan knows how Celinawill react and chooses the number of JRTs that she herself will sell, q2, aftertaking this information into account. The inverse demand function for JRTs isP(q1 + q2) = 2, 000 − 2(q1 + q2). It costs $400 to raise a JRT to sell.(a) Explain in detail what type of competitors are Aidan and Celina.(b) If Celina expects Aidan to sell q2 JRTs, what will her ownmarginal revenue be if she herself sells q1 JRTs?(c) What is Celina’s reaction function, R(q2)?(d) Now if Aidan sells q2 JRTs, what is the total number of JRTsthat will be sold?(e) What will be the market price as a function of q2 only?(f) What is Aidan’s marginal revenue as a function of q2 only?(g) How many JRTs will Aidan sell?(h) How many JRTs will Celina sell?(i) What will be the industry price? ANSWER…
The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let’s work through the decision at the level of one color of golf shirts sold per outlet store per day. The decision being made is how low a price to select at the start of any given day to generate sales at that price throughout the day. The demand, revenue, and variable cost information is collected on the following spreadsheet:Questions1. Identify the change in total revenue (the marginal revenue) from the fourth shirt per day. What price reduction was necessary to sell four rather than three shirts?2. Does this fourth shirt earn an operating profit or impose an operating loss? How large is it?3. What is the change in total revenue from lowering the price to sell seven rather than six shirts in each color each day? In what sense is the decision to sell this seventh shirt…
Aidan and Celina are the only sellers of jack russell terrier (JRT) inAntigua. Celina chooses her profit maximizing number of JRTs to sell, q1, based on the number of JRT's that she expects Aidan to sell. Aidan knows how Celina will react and chooses the number of JRTs that she herself will sell, q2, aftertaking this information into account. The inverse demand function for JRTs isP(q1+ q2) = 2,000 - 2(q1 + q2). It costs $400 to raise a JRT to sell. (a)Explain in detail what type of competitors are Aidan and Celina. (b) If Celina expects Aidan to sell q2 JRTs, what will her own marginal revenue be if she herself sells q1 JRTs? (c) What is Celina's reaction function, R(q2)?(d) Now if Aidan sells q2 JRTs, what is the total number of JRT's that will be sold. (e) What will be the market price as a function of q2 only? (f) What is Aidan's marginal revenue as a function of q2 only? (g) How many JRTs will Aidan sell? (h) How many JRTs will Celina sell? (i)
If consumers can easily switch to a close substitue when the price of a good increases, demand for that good is likely to be:
A firm faces two types of consumers. Consumer A has an inverse demand of P = 120-10 Q and consumer B has an inverse demand of P = 60-2Q. The firm has a constant marginal cost of $20. Assume the firm does not know which type a given consumer is. She offers to sell the good at a price of 70$ per unit. However, if the customer buys 10 or more units, she will offer a quantity discount and charge only 40$ per unit (including the first 10). Which consumer will use the price discount? Question 7 options: Neither costumer will purchase from this firm at all. Customer A will choose the quantity discount and customer B will not choose the quantity discount. Both consumers will chose the quantity discount. Neither of the two consumers will opt for the quantity discount. Instead, both will purchase at the higher price of 70 and buy less than 10 units each. Customer B will choose the quantity…
A firm faces two types of consumers. Consumer A has an inverse demand of P = 120- 10 Q and consumer B has an inverse demand of P = 60-2Q. The firm has a constant marginal cost of $20. Assume the firm does not know which type a given consumer is. She offers to sell the good at a price of 70$ per unit. However, if the customer buys 10 or more units, she will offer a quantity discount and charge only 40$ per unit (including the first 10). Which consumer will use the price discount? Both consumers will chose the quantity discount. Neither of the two consumers will opt for the quantity discount. Instead, both will purchase at the higher price of 70 and buy less than 10 units each. Customer A will choose the quantity discount and customer B will not choose the quantity discount. Customer B will choose the quantity discount and customer A will not choose the quantity discount. Neither costumer will purchase from this firm at all.
Larry, Curly, and Moe run the only saloon in town.Larry wants to sell as many drinks as possiblewithout losing money. Curly wants the saloon tobring in as much revenue as possible. Moe wantsto make the largest possible profits. Using a singlediagram of the saloon’s demand curve and its costcurves, show the price and quantity combinationsfavored by each of the three partners. Explain. (Hint:Only one of these partners will want to set marginalrevenue equal to marginal cost.)