Classics by Cathy is a United States company that sells upscale clothing worldwide. Classics sells clothes to Britain's Best Clothing inEngland. After a dispute arises between the two companies, Britain's Best sues Classics in England. Classics does not respond to thelawsuit, and a default judgment is entered against Classics. When Britain's Best brings the default judgment to the United States forcollection, the United States court will:O require the parties to litigate the dispute before the United States court.O not honor the default judgment because it was not obtained in a United States.court.honor the default judgment under the principle of sovereign immunity. require the parties to litigate the dispute before the United States court.not honor the default judgment because it was not obtained in a United States court.honor the default judgment under the principle of sovereign immunity.honor the default judgment under the principle of comity because this judgment is consistent with the law of theUnited States.

Classics by Cathy Is a United States company that sells upscale clothing worldwide. Classics sells…

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Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.11P

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3 1. Describe the bidding process by which the electricity generation sector provides electricity to pooling and balancing authorities. Additionally, show this process by building an electricity supply curve. a. What antitrust and regulation concerns are present at the wholesale stage of the electricity market? b. Describe a market design that reduces market manipulation in wholesale electricity markets. Show that the Nash equilibrium under this market design will result in generators bidding their true marginal cost of production. c. Describe a vertically integrated industry as it pertains to the electricity sector. d. Describe non-linear (two part) pricing as it pertains to retail electricity sales. What is the purpose of this pricing system?
Question 1.Assume there are only two art auction companies who account for 100% of all the sales of 19thCentury impressionist master work paintings in the world. Assume that each company buys thiskind of painting and then resells the paintings at monthly auctions. Ignoring the question of anylaws that might apply, describe what economic arrangement would maximize the twocompanies’ total profits? Show with supply and demand curves what profit they would makefrom this arrangement and what societal welfare loss, if any, results from it.
Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior to the merger, the market for four-wheel-drive tractors consisted of five firms. The market was highly concentrated, with a Herfindahl-Hirschman index of 2,765. Case’s share of that market was 22 percent, while Fiat comprised just 12 percent of the market. If approved, by how much would the postmerger Herfindahl-Hirschman index increase? Based only on this information, do you think the Justice Department would challenge the merger? Explain.
16-1 Newspaper Bargaining Two equal-sized newspapers have an overlap in circulation of 10% (10% of the subscribers subscribe to both newspapers). Advertisers are willing to pay $10 to advertise in one newspaper but only $19 to advertise in both, because they’re unwilling to pay twice to reach the same subscribers. What’s the likely bargaining negotiation outcome if the advertisers bargain by telling each newspaper that they’re going to reach an agreement with the other newspaper, so the gains to reaching agreement are only $9? Suppose the two newspapers merge. What is the likely post-merger bargaining outcome? these would be most advantageous from a bargaining position?
Suppose two firms compete in quantities (Cournot) in a market in which demand is described by: P=260-2Q. each firm incurs no fixed cost but has a marginal cost of 20. Now imagine they collude to produce the monopoly output. Suppose that after the cartel is established, firm 1 decides to cheat on the collusion, assuming the other firm will continue to produce its half of the monopoly output. What will be firm 1's profit if firm 2 continues producing the monopoly outcome? a. 4500 b. 5200 c.4200 d. 4050 Should firm 2 respond and increas their quantity? Yes or No
1. Assume the market demand for carbonated water be given by QD = 200 − 5P. Assuming there are two firms (A and B) producing carbonated water, each with a constant marginal cost of $ 2. a. What is the market equilibrium price and quantity when each firm behaves as a Cournot duopolist choosing quantities? What profit does each firm earn? b. What is the market equilibrium price and quantity when each firm behaves as a Bertrand duopolist choosing price? What firm profit does each firm earn now?
Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior to the merger, the market for four-wheel-drive tractors consisted of five firms. The market was highly concentrated, with a Herfindahl-Hirschman index of 3,085. Case’s share of that market was 11 percent, while Fiat comprised just 7 percent of the market. If approved, by how much would the postmerger Herfindahl-Hirschman index increase?
Suppose three Cournot competitors, each with costs Ci = 30qi, face an inverse market demand curve of P = 480 – 4Q. Suppose merging will not change costs. a. Find profits for the three firms. Note: Don’t round your answers. How will the profits change for F1 and for F2|3 if F2 and F3 merge? b. Suppose that after the merger occurs, F1 and the new firm F2|3 successfully collude at setting the monopoly price and output, and splitting the resulting monopoly profits. How, if at all, does this change the impact of the merger on F1 and on the merged firm?
Title 1. Two firms have costs of AC 1 = MC 1 = 20 and AC 2 = MC 2 = 16 respectively. Market demand is Q =. Description 1. Two firms have costs of AC1 = MC1 = 20 and AC2 = MC2 = 16 respectively. Market demand is Q = 1000 − 40P. a. Suppose irms practice Bertrand competition, that is, setting prices for their identical products simultaneously. Compute the Nash equilibrium prices. (To avoid technical problems in this question, assume that if irms both have the same price, then the low-cost irm makes all the sales.) b. Compute irm output, irm proit and market output. c. Is total welfare maximised in the Nash equilibrium? If not, suggest an outcome that would maximise total welfare, and compute the deadweight loss in the Nash equilibrium compared with your outcome.
ft : 00:09:48 Resale price maintenance can prevent showrooming. True False In a successive monopoly structure, if distributor has a constant marginal cost of $5 and is paying the producer $12 per unit, which is the profit-maximizing wholesale price, what is the distributor's marginal revenue at this output level? $17 $12 $7 $5
1.-There are only two firms in the market, Firms A and B, producing differentiated products. Specifically, the demands for the two firms' products are given by qA = 30 − 2pA + pB and qB = 15 − 2pB + pA, where pi denotes the price charged by Firm i and qi denotes the resulting number of units that will be purchased from Firm i. Each firm can produce as much as it chooses, at zero marginal cost. The firms compete with one another in prices. (a) Draw the two firms' reaction functions in a diagram with p1 and p2 on the axes. (b) Determine the equilibrium prices and quantities.
5. If Amazon were to purchase UPS, this would be an example of a: A. Horizontal mergerB. Vertical mergerC. Conglomerate mergerD. Parallel merger

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