As the firms operate as a cartel in the same market, they would not be able to work at different price points. The lower price would prevail. Under this condition, what would be their outputs and profits? Represent the above situation with a suitably labelled diagram.
Q: When airfares between Santa Rosa and Los Angeles averages $69, the quantity consumed is 42,500…
A: Disclaimer :- since you have asked multipart questions we can solve only 3 subparts as per…
Q: A contractor won a bid to repave so many kilometers of a badly damaged concrete road in the south.…
A: Let us assume the value of sq m to make crane economical be (x) . To find the value of (x) we need…
Q: Question 2 The market for leather shoes is served by both domestic (SA) and foreign (F) producers.…
A: Introduction Market for leathers served both domestic (SA) and foreign (F) producers. a) When there…
Q: Explain how the price and quantities are determined in a natural monopoly
A: The demand curve shows the inverse relationship between price and quantity demanded. The demand…
Q: A sports wear factory has two alternative machines for producing jerseys. Costs are shown below.…
A: Given; For Machine X:- Initial Cost= P243000Salvage Value= P36450Operating Costs= P9500 per…
Q: Explain the effects of the pound devaluation on (1) imports and tourism to Great Britain and (2)…
A: The exchange rate is the rate at which where two nations currencies are exchanged in foreign…
Q: Refer to Table 13-1. What is the average total cost of producing one widget? b. $15 a. S1 c. $16 d.…
A: Formula to be used: For all quantities, the fixed cost remains the same. TC=FC+VC VC=TC-FC…
Q: How would a Keynesian Economist use Fiscal Policy to fight a Recession? Please do not write about…
A: "Recession means reduction or fall in the economic activity and this fall is visible in real GDP,…
Q: What is the Relationship of Price to Quality?
A: The quality of the product is judged according to its price.
Q: ANSWER C Suppose market demand for tires in millions is given by the equation QD = 12 – P. Tires…
A: Given; Market demand function; QD=12-P Market supply function; QS=2P At equilibrium;…
Q: Peg repairs transmissions. Her fixed costs are $300 a month and it costs her $24 of labor to repair…
A: A firm maximises profit at the level of output where marginal revenue (MR) equals marginal cost…
Q: Last year aria left her job earning $82,000 per year in order to start her own cupcake business Her…
A: Here, Last year aria left her job earning $82,000 per year in order to start her own cupcake…
Q: 10. Using money creation to pay for government spending Consider Snackistan, a hypothetical country…
A: Given; Price of burritos in 2017= $2.00 Amount spent on burritos= $900 a) Quantity of burritos…
Q: Given the national income model Y=E; E=C+I where C= 280 +0.6Y, lo=80: a) Write down the value of the…
A: The macroeconomic equilibrium of the economy is achieved where the total income of the country is…
Q: Fiscal and Monetary Policy Assignment When the economy gets into serious problems, the government…
A: Answer D. Monetary policy refers to central bank actions aimed at influencing the amount of money…
Q: Use your own example to clearly differentiate between an "accounting profit" and an "economic…
A: When talking about the difference between economic and accounting profit, it can be said that…
Q: Refer to Figure 2,which of the following pairs of price and quantity best represents black market?…
A: Black Market The black market is a market that develops as a result of a shortage of commodities in…
Q: Consider a lottery L1 that gives income £7,000 with probability 1, and a lottery L2 that gives…
A: "In economics, utility represents satisfaction which a consumer gets from a commodity or a service.…
Q: Proposed the four strategies and enforcement for the Malaysian government in the future directions…
A: There are many measures that can be taken in order to reduce the fluctuation in macroeconomics like…
Q: 13. Market Imbalances and Rent Adjustment Process - what if the nominal vacancy rate is higher or…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: A basic life insurance illustration of non-guaranteed elements must be accompanied by a statement…
A: Insurance refers to the policy or scheme that banks or firms give its customers in exchange for some…
Q: Merge the two budget constraints into a single lifetime budget constraint by eliminating savings…
A: The consumption function shows the positive relationship between disposable income and consumption.…
Q: Why do many people feel that local self-sufficiency is important? What consequences of globalization…
A: Globalization refers to the interdependence of the countries on each other for specific goods,…
Q: Evaluate the need for confidentiality in the contexts of a variety of research topics ?
A: Confidentiality is taken to mean. that classifiable info regarding. people collected throughout the.…
Q: What are the consequences of the central-city dilemma?
A: Central-city conundrum People in need of public services in a concentrated area with no money…
Q: bit 23-9 Market Price and Cost P2 Pi Single Firm SRATC MC LRATC d 0 9₁ 92 Quality Quantity to…
A: Market demand is the all out quantity demanded across all consumers in a market for a given good.
Q: Assume you have $12,000 in cash. You can deposit it today in a mutual fund earning 8.2%…
A: Given: Cash in hand = $12,000 Interest rate of = 8.2% semiannually Or invest = $11,000 in 2 years…
Q: 7. How can expectations affect demand and supply in the real estate market?
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: You and two friends have identified a gap in the market in your hometown for work-from-home…
A: The system through which governments or societies tend to distribute and organize services,…
Q: Trans Coaches has since gained more customers since its competitor Ecobus had gone bankrupt.…
A: The number of people wanting and able to acquire things at various prices during a certain period of…
Q: Given the information on the graph below, Р MC 16 12 8 8 10 Q a) find the firm's short run output…
A: Hi! Thank you for the question. As per the honor code, We’ll answer the first question since the…
Q: 5. How would an exogenous factor affect the demand/supply for real estate? (either positive or…
A: Since you have asked multiple questions, we will solve first question for you. In case you want…
Q: estion 1 Two computer firms, A and B, are planning to market network systems for office information…
A: The pay-off matrix shows the mixtures of the outcomes that are attainable from any strategic…
Q: B) Is this price elastic or inelastic? Should the boosktore charge more or less to maximize revenue?…
A: The measure that depicts change in quantity being demanded of a good with respect to its price level…
Q: Which of the following is true at the exchange equilibrium between two individuals? A. Their…
A: Exchange equilibrium shows the equilibrium for two individuals given the endowments and prices of…
Q: Which of the following services are provided by the federal government? Group of answer choices a…
A: Federal government provides various services to the people in return of their income tax and to…
Q: Why do poorer societies have higher population growthrates than wealthier societies? How does…
A: When talking about difference in the population growth between poor societies and wealthier…
Q: ow did “trickle-down economics” differ from economic strategies used in previous administrations?…
A: Answer is give below
Q: What are the arguments against international free trade and what policies does the government have…
A: International free trade basically refers to the trade between various nations or countries freely,…
Q: Inflation expectations refer to the rate at which: Group of answer choices actual inflation exceeds…
A: Inflation refers to the rate of change in the market value of products and services over time.
Q: Distinguish between private and public goods externalities. Discuss the likelihood of bargaining…
A: Positive externalities and public goods are concepts that are closely related. Public goods, such as…
Q: How can Theory of Economic Development promote businesses to perform better?
A: Economic development: It refers to the strategies that deal with the development process of the…
Q: Suppose China can produce two goods, cloth and food and has three factors of production labor (L),…
A: Factors of production Factors of production refer to the resources which are used while…
Q: A motor company invests in a new transmission lubricant that increases fuel mileage by 10% and…
A: The cost study and evaluation of systems, products, and services is what the engineering economy is…
Q: Monetary policy involves O altering the money supply to influence the level of economic activity. O…
A: In an economy, there are different types of economic policies used to influence the market outcome,…
Q: 140 123.33 90 56.67 Price 100 133.33 -MR MC ATC Demand Quantity
A: Here, the given graph shows the revenue, demand, and cost curves of a firm.
Q: Describe what benefits may come from a reproductive policysuch as China’s. Now describe several…
A: The government should be empowered to impose severe penalties on citizens who refuse to follow such…
Q: 1. ) Which of the following describe/s the regulatory purpose of taxation a. Collection of Income…
A: Since you have asked multiple questions, we will solve first question for you. If you want any other…
Q: Are there other countries around the world that you think might be the next site of an HIV/AIDS…
A: Currently, HIV/AIDS is a pandemic in African countries such as South Africa, Nigeria, Chad, Zambia,…
Q: ECONOMY-How a civilization makes money through the buying and selling of goods and services. (Some…
A: The answer is given below
Step by step
Solved in 2 steps with 1 images
- If the market described in the accompanying diagram is dominated by a cartel, the loss in total surplus relative to perfectly competitive market conditions will be what?In a Cournot duopoly, each firm has marginal cost MC=20, and market demand is Q=100-0.5p. What are the best response functions of each firm? What is the best output level for each? How does the total output level compare to the cartel output level?Consider an industry with two firms, each having marginal costs and total costs equal to zero. The industry demand is P = 100 − Q where Q = Q1 + Q2 is total output. 1. Find the cartel output and cartel profits assuming that the firms share the profit equally. In cartels, firms behave as if they are a monopoly. Hence, the cartel quantity is at the point where MR = MC. After finding the quantity, use the demand curve to find the cartel price. And then calculate Π = T R − T C. Divide the total profit by 2 to find each firm's profit. 2. If each firm behaves as a Cournot competitor, what is firm 1's optimal output given firm 2's output? This part is asking the best response function of firm 1. Solve firm 1's profit maximizatin problem by setting its MC = MR. Then, express Q1 as a function of Q2. 3. Calculate the Cournot equilibrium output and profit for each firm. You have already solved firm 1's problem above. Now solve firm 2's problem. Then, solve BR functions simultaneously to get…
- Suppose that two identical firms produce widgets and that they are the only firms in the market. The average and marginal cost is €6 for each firm. Price is determined by the following demand curve: P = 30 – Q where Q = Q1 + Q2. Suppose the two firms combine together and form a cartel. The output produced by each firm in the cartel is (assuming that they split the cartel output equally between them) A. 6 B. 12 C. 8 D. 4 Two identical firms compete in a market to sell a homogenous good with the following inverse demand function: P = 600 – 3Q. Each firm produces at a constant marginal cost of €300 and there are no fixed costs. The price that each firm in the Cournot equilibrium will charge is A. 400 B. 500 C. 300 D. 450Which of the follow industries is the best example of an existing cartel? Group of answer choices Microsoft and Apple—two of the largest computer manufacturers Verizon and AT&T—two of the largest American mobile phone service providers GM, Chrysler, Ford—The big three American automobile companies OPEC, the Organization of Petroleum Exporting CountriesConsider an industry with two firms, each having marginal costs and total costs equal to zero. The industry demand is P = 100 − Q where Q = Q1 + Q2 is total output. 1. Find the cartel output and cartel profits assuming that the firms share the profit equally. Hint: In cartels, firms behave as if they are a monopoly. Hence, the cartel quantity is at the point where MR = MC. After finding the quantity, use the demand curve to find the cartel price. And then calculate Π = T R − T C. Divide the total profit by 2 to find each firm’s profit. 2. If each firm behaves as a Cournot competitor, what is firm 1’s optimal output given firm 2’s output? Hint: This part is asking the best response function of firm 1. Solve firm 1’s profit maximizatin problem by setting its MC = MR. Then, express Q1 as a function of Q2. 3. Calculate the Cournot equilibrium output and profit for each firm. Hint: You have already solved firm 1’s problem above. Now solve firm 2’s problem. Then, solve BR functions…
- The managers of these firms realize that explicit agreements to collude are illegal.Each firm must decide on its own whether to produce the Cournot quantity or the cartel quantity.To aid in making the decision, the manager of Firm A constructs a payoff matrix like the realone below. Fill in each box with the (profit of Firm A, profit of Firm B). Given this payoff matrix,what output strategy is each firm likely to pursue?Consider a Cournot duopoly, where each firm has a marginal cost MC = 80, and the total market demand is given by Q= 400-(1/2)P a) What are the best-response functions of each firm?b) What is the equilibrium output level for each firm?(c) How does the total output level compare to the cartel (collusive) output level?Assume the management of two large firms selling canned vegetables hold a secret meeting to create a collusive cartel. Which will most likely be the outcome of that meeting, assuming both companies engage in the collusion? soda output will fall and market prices will fall market price will remain unchanged and total output will fall soda output will fall and market prices will rise soda output will rise and market prices will fall soda output will rise and market prices will rise
