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- Consider a duopoly in which the marginal cost of every firm is $2. The market demand is: Q = 14 - P, where Q = q1 + q2, and P denotes the price per unit. Calculate the total output, price and production quotas (assuming each firm has 50% of the market) if the firms maximize the joint profits. Total output Q = Price P = $ Production quotas q1 = , q2 =Consider a duopoly with a leader (called L) and a follower (called F). The market demand is given as: P=500-0.25Q, where Q=QL+QF The total cost function for the leader is given as: TCL=0.03QL The total cost function for the follower is given as: TCF=0.1QF All variables are per day, per plant. What is the profit-maximizing quantity for the leader (per day, per plant)? (Note: Round your answer to two decimal pointsConsider a market where the inverse demand function is P = 100 - Q. All firms in the market have a constant marginal cost of $10, and no fixed costs. Compare the deadweight loss in a monopoly, a Cournot duopoly with identical firms, and a Bertrand duopoly with homogeneous products.
- Take a market that fulfills the monopoly model assumptions. Inverse demand is P = 40-Q and marginal cost MC 4+2Q. Find the equilibrium price, quantity, consumer surplus, producer surplus, total surplus, and deadweight loss.You are the manager of a monopolistic firm, and your demand and cost functions are given by P = 300 − 3Q and TC(Q) = C(Q) = 1,500 + 2Q2, What is the value of the consumer surplus under monopoly? What is the value of the dead weight loss? What is the value of Lerner index? Explain what your result means.Consider an oligopoly industry whose firms have identical demand and cost conditions. If the firms decide to collude, then they will want to collectively produce the amount of output that would be produced by: a. A monopolistic competitor. b. A pure competitor. c. A pure monopolist. d. None of the above.
- What price will colluding oligopolist set? a. Monopoly price. b. Limit price. c. Marginal cost-based price. d. Price at the kink of the demand function. e. None of the above.A monopoly firm faces two markets where the inverse demand curves are Market A: Upper P Subscript Upper A Baseline equals 140 minus 2.75 Upper Q Subscript Upper APA =140 − 2.75QA, Market B: Upper P Subscript Upper B Baseline equals 120 minus Upper Q Subscript Upper BPB = 120 − QB. The firm operates a single plant where total cost is C = 20Qplus+0.25Q Superscript 2, and marginal cost is m = 20 + 0.5Q. Part 2 Suppose the firm sets a single price for both markets. Using the information above, the profit maximizing price is $86.18 and the profit maximizing quantity is 53.37 units. Given this information, you determine that the firm will earn a profit of $Is the following statement correct? "The antitrust laws in reality deal less with monopolies than with oligopolies."
- Differentiate between oligopoly and pure monopoly.Consider a Bertrand duopoly. Market demand is P(Q)=41-3Q, and each firm faces a marginal cost of $4 per unit. How much is the sum of firms' total revenue in the Nash equilibrium?A nightclub manager realizes that demand for drinks is more elastic among students, and is trying to determine the optimal pricing schedule. Specifically, he estimates the following average demands: • Under 25: qr = 18 − 5p • Over 25: q = 10 − 2p The two age groups visit the nightclub in equal numbers on average. Assume that drinks cost the nightclub $2 each. (a) If the market cannot be segmented, what is the uniform monopoly price?
