Problem Set 4

Q) What is the predicted pattern of trade under monopolistic competition? Explain why export prices fall in this trade model. Solve it early and explain correctly.  Not copy paste from Anywhere.

Answer the second part

Question 6 Assume Eric and Kenny control all the Oil in the world. They have agreed to divide the world market with Eric selling 1,200 Barrels and Kenny selling 1,400 Barrels. They have found through experience that the Demand Curve for Oil has the following values, and the following total revenues: Eric Quantity 2,600 Barrels 3,200 Barrels 3,400 Barrels 4,000 Barrels 1,200 Barrels 2,000 Barrels Price $77.75 $56.00 $47.75 $20.00 1,400 Barrels Total Revenue $202,150 $179,200 $162,350 $ 80,000 $93,300 $108,850 $95,500 $66,850 The Missing Value for Kenny is: [Select] Kenny Is there a short-term incentive for Kenny to Cheat? [Select] Is there a short-term incentive for Eric to Cheat? [Select] 2,000 Barrels $67,200 $40,000 $112,000 ?Missing Value? Over the Long-Run are they Likely to Overcome any Hurt Feelings and return to the Agreement? [Select]

QUESTION 36 In 2018, a few countries want to join together to restrict the oil supply to the world market. Together, these countries' exports of oil account for 80% of the total global trade. What would they be trying to accomplish?     They are attempting to form a cartel, increase their joint output, and control a larger percentage of the total global trade.     They are attempting to price discriminate between consumers of their exported oil, thereby increasing their share of the global trade and increasing their joint profits.     They are attempting to form a cartel, jointly restrict output, and increase the world price of oil.     They are attempting to act as a bloc to restrict entry of new producers to the world market, and thereby protect their joint profits.

Examples of this market from uae or Gcc countries :  1- competitive market: 2-monopoly : 3-monopolistic competition : 4-oligopoly:

Economics: Industrial Economics Question: In a market that operates under quantity competition there are 2 firms (Cournot duopoly). The inverse demand function is P = A - B Q. The cost structure of firm 1 is given by C1(q1) = F1 + c1 q1 and that of firm 2 is given by C2(q2) = F2 + c2 q2. Prior to competing, the two firms can engage in research at levels (x1, x2) respectively in order to lower their marginal costs. As a result, marginal costs are c1 = c - x1 - β2x2 and c2= C - x2 - β1 X1. where β1 = β2 > ½. Finally, the research costs are F1 = a1 (x1)^2 /2 and F2 = a2 (x2)^2 /2, where a1 > 0 and a2> 0.   1. The Nash Equilibrium research levels are Choices: A. Higher than the cooperative research levels for both firms. B. Higher than cooperative research levels for firm 1 but lower for... C. Lower than the cooperative research levels for both firms. D. Higher than cooperative research levels for firm 2 but lower for...   2. An increase in the value of a2 would Choices: A.…

Discuss gains from international trade in the presence of heterogeneous firms in a monopolistically competitive market.

Imagine a small town in a remote area where only two residents, Maria and Miguel, own dairies that produce milk that is safe to drink. Each week Maria and Miguel work together to decide how many gallons of milk to produce. They bring milk to town and sell it at whatever price the market will bear. To keep things simple, suppose that Maria and Miguel can produce as much milk as they want without cost so that the marginal cost is zero. The weekly town demand schedule and total revenue schedule for milk is shown in the table below: Quantity (in gallons) 10 |1 O b. $12 O c. $10 d. S8 2 113 14 לן 16 17 18 19 10 11 12 Price $24 $22 $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 Total Revenue (and Total Profit) $0 $22 $40 $54 $64 $70 $72 $70 $64 $54 $40 $22 $0 Refer to Table 17-3. Suppose the town enacts new antitrust laws that prohibit Maria and Miguel from operating as a monopoly. What will be the price of milk once Maria and Miguel reach a Nash equilibrium? a. $14

Q) What is the predicted pattern of trade under monopolistic competition? Explain why export prices fall in this trade model.        Solve it correctly.       Not copy paste answer gives

1. Suppose the following: I. Two countries each with demand for homogeneous goods given by P(Q) = 40 - Q In country A there is one firm with marginal cost of production of CA. III. In country B there is one firm with marginal cost of production of CB. Competition in relevant markets is Cournot IV. a) Find for each country expressions for the equilibrium price and equilibrium quantity and firm profits under the assumption that no occurred between the two countries occurred. b) Now assume a state of free trade occurs between the two countries. Derive expressions for each firm's quantity supplied and country A's imports. c) Assuming that CB=10 and C₁ = 8. Which Country stands to benefit by imposing k2 per unit tariff on imports? By how much would total surplus increase? Who gains and who Loses and by how much? II.

Assume that the countries of Irun and Urun are the only two producers of crude oil. Further assume that both countries have entered into an agreement to maintain certain production levels in order to maximize profits. In the world market for oil, the demand curve is downward sloping. Refer to Scenario 16-1. The fact that both countries have colluded to earn higher profit shows their desire to keep production levels above the monopoly level of output. below the Nash equilibrium level of output. equal to the Nash equilibrium level of output above the Nash equilibrium level of output.

QUESTION 9 After a complex process of mergers and acquisitions, the technology company Globocorp Enterprises has acquired control of all the world's sigmantium (which is a semi-conductor that is essential to manufacture mobile phones). As a result of its control of international sigmantium production, Globocorp Enterprises is now the world's only supplier of mobiles and it therefore operates as a profit maximising monopolist in this market. Their marginal cost of production for each mobile is $160 per phone. Below is a table of prices Globocorp can charge for each mobile that it produces, and the corresponding quantities sold on any given day. Price ($/mobile phone) 400 380 360 340 320 300. Quantity (mobile phones) 45000 50000 55000 60000 65000 70000 What is Globocorp Enterprises' daily revenue at the profit maximising level of production? Answer to the nearest whole number (with no decimal places or $ sign), and only use the options in the table above.

Scenario Many small shops sell different styles of sweaters. Some stores sell higher-quality and more expensive sweaters than other stores. Dozens of companies produce plain white socks. The standard technology for producing socks is widely known and available to anyone who wants to enter the business. Four Internet providers offer similar services to almost everyone in the city. Any new company would have to engage in a price war with the existing companies. Scholastik Inc. owns the U.S. copyright to a popular series of books. It is the only company with the legal right to publish these books in the United States. Number of Firms (One, Few, Many) Type of Product (Homogeneous, Unique, Differentiated) Entry (Easy, Challenging, Impossible) Market Model (Perfect Competition, Monopoly, Monopolistic Competition, Oligopoly)

Back in 2012, the world’s largest provider of chipsets for devices (e.g. smartphones, tablets) running on 4G network signed an agreement with one of the leading device manufacturers, committing to make significant payments to this manufacturer on condition that the manufacturer would exclusively use its chipsets. This was found to be violating competition law. a) Use economic theory to explain why such an agreement violates competition law and can hinder competition in the market. b) If you are working for the chipsets provider, how can you use economic theory to defend your company?   (1000 words)

Examples of this market from any country :  1- competitive market: 2-monopoly : 3-monopolistic competition : 4-oligopoly:

Suppose Grady, Grace, and George own the 3 wrecker services in the small town of Collisionville. Each currently charges $350 for a standard towing job within town. Competition is heating up and each wants to grow their market share. Use this information to answer the following: What does the Law of Demand say that Grace can do to grow her market share? Suppose that the Kinked Demand Curve Theory describes this market well. How would considering this theory impact Grace’s decision on part 1?

1. Consider the (inverse) market demand function for the market in streaming services. P = 120 - 4Q Assume further that the available technology results in Marginal Cost equal to $40. a) Graphically show the market outcome for monopoly, Cournot oligopoly and perfect competition. b) For monopoly, Cournot duopoly and perfect competition determine the optimal outcome. Clearly explain how you arrive at your answer. What are the market price and quantity under each market structure? c) What are the consumer surplus, producer surplus and total surplus under each scenario? d) Show the reaction function under Bertrand competition. What are the associated price and quantity?

1. Which of the following companies most closely resembles a monopoly? Walmart Microsoft Starbucks McDonald's Question Source: Chiang 4e - Economics Princip 39 36 近

Suppose button industry is characterized by monopolistic competition with external economy. China is currently the dominant producer of buttons. Explain why Vietnam may find it difficult to compete with China in a button industry even if Vietnam has lower average cost as a function of the size of the industry

Question 1.1  Mutual interdependence would tend to limit control over price in which market model?                 Monopolistic competition        Pure competition        Pure monopoly        Oligopoly