If three firms that comprise an oligopoly form a cartel, which of the following statements is likely to be true. O Each firm will increase output. O The costs of each firm will decline. O In the industry the market price will increase. All of the above are likely to be true.
Q: Kyle is a grade 5 student currently taking his modular class at home since the pandemic happened in…
A: Between 5th and high school its 7 years Amount saved = 500Php twice a month Interest rate (i) =…
Q: If a bank has deposits of $1,000 and the required reserve ratio is 10% then the level of required…
A: Required reserve ratio is the percentage of legal minimum requirement that a bank needs to hold as…
Q: Assume that in the population, 95 millic people worked for pay last week, 5 milli people did not…
A: Labor force is the sum of people who are employed and unemployed. Employed are those people who are…
Q: The interests of environmentalists and business are almost always directly opposed to each ot Being…
A: Business/corporate environmentalism includes the acknowledgment by firms that ecological issues…
Q: In 2021, the exchange rate between the Swedish Kronor (SK) and the $ dollar was Es/SK = 0.07 $,…
A: The rate at which one currency is exchanged for another is known as an exchange rate. National…
Q: GMA will be visiting an automobile plant. It was decided by the plant management that they must…
A: Boysen Cost of Paint = 70 per gallon Covers = 350sq. ft per gallon time period = 5 years applied…
Q: A couple recently got preapproved on a loan for their first house purchase. They are speculating on…
A: Low bid refers to the minimum amount of bid that a buyer can bid. This is possible if a seller is…
Q: Suppose a monopolist faces a demand curve D(p) = 10 - P. It has no variable cost, but it incurs a…
A: Answer - Quasi Fixed cost :- It is a fixed which has the property of fixed as well as the variable…
Q: Suppose a closed economy with no government spending or taxing is capable of producing an output of…
A: Consumption is the sum of Autonomous consumption and induced consumption. Autonomous consumption…
Q: If a Japanese car costs P*=1,000,000 yen, a similar American car costs P= 20,000, and a dollar can…
A: As it is given japanese car cost p*=1,000,000 yen american car cost p=20,00 e=100 yen/$
Q: 1. The Following equations describe an economy: Y=C+I+G C = 240 +0.5(Y-T) I = 200-10r G = 100 T = 80…
A: GDP is the sum of consumption, investment and government spending in a closed economy. At…
Q: Economics A monopolist competition firm has MR=MC=50, ATC=40, P= 35 at the current outpur level of…
A: We have given MR=MC=50 , ATC=40 and p=35
Q: Compute the nominal GDP Year: 2021 Value added of agriculture, fishery and forestry sector Value…
A: Nominal GDP = C+I+G+NX
Q: How does the rate of population growth influence the level of GDP per person?
A: (Q) How does the rate of population growth influence the level of GDP per person?
Q: In the market for reserves, if the Federal Reserve Bank increases the required reserve ratio, this…
A: Required reserve ratio:- A required reserve ratio can be explained as the percentage of assets which…
Q: In a column in the Washington Post, Robert J. Samuelson wrote: "As for what's caused greater…
A: In the society there exists inequality in earning capacity of people. This is why the government…
Q: Prospect Y = ($9, 0.25 ; $137, 0.75) What is the expected value of Prospect Y?
A: Given Prospect Y = ($9, 0.25 ; $137, 0.75)
Q: 1. Production Possibilities Frontier
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: If the monopolist is incurring a short run economic loss, what are some options the monopolist has?
A: Monopoly is a market condition where there is a single seller. It sells a unique commodity in the…
Q: Any output produced by U.S. firms is included in the value of U.S. GDP, even if the output was…
A: GDP refers to the all final values of good and service that produced within the domestic territory…
Q: Suppose in the market for gasoline the demand is given by P = 8000 – Qd and the supply is given by P…
A: With the negative production externality, SMC becomes more than PMC
Q: Assume a government has $28,667 in tax revenues and $40,094 in total government spending. What is…
A: Answer; Government budget balance= Tax revenue-total expenditure Here, Tax revenue = $28,667 and…
Q: What changes occur in the graph of Tina's demand curve as the price of bottled water rises? As the…
A: Answer is given below
Q: Consider a monopolist with the following demand and cost function: Demand: P = 200 -0.10 Cost: C =…
A: We have downword sloping demand for monopolist and given cost function a function of Q.
Q: 2. Consider the two-by-two bimatrix game listed below: Left Right Up Down (1,-1) (2,-2) (3,-3)…
A: Mixed strategy equilibrium is a randomization of pure strategy equilibrium. Let the probability with…
Q: Which of the following Exchange Rate Regime allows for government intervention in the market for…
A: In flexible exchange rate, the price of the currency is determined by the forces of demand and…
Q: $ 2.9 (b) How large is its dividend? Instructions: Enter your response rounded to two decimal…
A: The implied rate is an interest rate equal to the difference between the spot rate and the forward…
Q: Assume a company commenced operations on January 1, 2019. Its accounting records showed the…
A: Answer :- Option 4th is correct = $11,000 Formula :- Retained Earnings = Opening balance + Net…
Q: Consider an economy whose marginal propensity to consume is c = 0.6 and taxes, T, are lump sum.…
A: Saving is basically that part of income that is kept aside after consumption for future expenses. It…
Q: Which of the following would cause the supply of U.S. dollars in the forex market to decrease?…
A: The higher interest rate will attract foreign investments in a domestic country. If the interest…
Q: 1. Let preferences of both individuals be given by log(c) + log(c₂). Suppose that the endowment…
A: Consumer preferences basically refers to as subjective (individual) tastes for distinct bundles of…
Q: Starting with a long run equilibrium, a Fed policy insisting on an even higher GDP may lead to a…
A: GDP is the value of final goods and services produced in the economy within a given period of time.
Q: Suppose firm VACC produces in a (perfectly) competitive industry and has the cost function C = 300 +…
A: Answer; a) MC = 4q + 15 b) VACC will produce 25 units. c) VACC’s profits = $950 d) Profit is…
Q: Indicate if the following statement is True or False “The basis for building a Pareto is the…
A: A scenario in which resources cannot be transferred to benefit one individual without injuring at…
Q: The Aggregate Demand line slopes down for a few reasons, one of which is ... Group of answer choices…
A: Aggregate demand shows an inverse relationship between price level and real output. It slopes…
Q: 1. Let preferences of both individuals be given by log(c) +log(c₂). Suppose that the endowment…
A: Market supply of each good is the sum of endowments of a good.
Q: If people use ketchup packets as a medium of exchange, what type of money would they be?
A: When ketchup packets act as medium of exchange then the money would be called as commodity…
Q: Suppose that there are only two goods produced in an economy haircuts and banking services Prices,…
A: “Since you have asked multiple questions, we will solve the first 3 subparts of the question for…
Q: 229 I invest $10,000 in an for 3 account years. The interest is 5% annually. How much money will I…
A: Given information, Principal amount (P): $10,000 Interest rate (r): 5% annually Time period (t): 3…
Q: In a decreasing cost industry _________ price in the long run. O economic profits occur at a higher…
A: A downward sloping long run supply curve distinguishes a decreasing cost industry. When a rise in…
Q: Studies about the effects of population growth on the economy are part of macroeconomics. True or…
A: Study of economics is broadly divided into 2 streams. One is microeconomics and another one is…
Q: Suppose a laptop manufacturer has the given total cost function and the given total revenue…
A: Here, total cost function and total revenue function are given as: C(x) = 200x + 8000 R(x) = 500x…
Q: High tax rates that put money into the government's funds tend to slow spending, and ultimately slow…
A: Tax: The word tax refers to the compulsory payment which is imposed by the government. It is also an…
Q: Suppose that all investors have the disposition effect. A new stock has just been issued at a price…
A: Given, Stock issued at a price of $50 A year later the stock will be take over price will be : $60…
Q: ENGINEERING ECONOMICS It costs P500,000 at the end of each year to maintain a section of Kennon…
A: Compound interest is also referred to as "interest that is not simple." Compound interest does not…
Q: The Shell Corporation has a 34% tax rate and owns a piece of petroleum-drilling equipment that costs…
A: iven information First cost=$119000 Annual revenue=$33100 Salvage value=$31600 CCA rate=30% Tax…
Q: Milo is the young, likable, optimistic, and generous son of a prominent public official. He has a…
A: * ANSWER :- From the given information the answer is provided below as
Q: A simplified version of input-output analysis of a national economy has the following input-output…
A: Answer im step 2
Q: A rising GDP, rising unemployment rate, and rising inflation rate signify a healthy economy. True or…
A: The gross domestic product (GDP) is a metric for determining the economic output of a country.…
Q: The $1.4 billion trick to make us accept income inequality Lotteries take money from the poor and…
A: Hi! Thank you for the question. As per the honor code, We’ll answer the first question since the…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- When OPEC raised the price of oil dramatically in the mid-1970s, experts said it was unlikely that the cartel could stay together over the long term-that the incentives for individual members. to cheat would become too strong. More than fort),r years later, OPEC still exists. Why do you think OPEC has been able to beat the odds and continue to collude? Hint: You may wish to consider non-economic reasons.Consider the curve in the figure below, which shows the market demand. marginal cost, and marginal revenue curve for firms in an oligopolistic industry. In this example, we assume firms have zero fixed costs. Suppose the firms collude to form a cartel. What price will the cartel charge? What quantity will the cartel supply? How much profit will the cartel earn? Suppose now that the cane] breaks up and the oligopolistic firms compete as vigorously as possible by cutting the price and increasing sales. What will be the industry quantity and price? What will be the collective profits of all firms in the industry? Compare the equilibrium price, quantity, and profit for the cartel and cutthroat competition outcomes.arises when firms act together to reduce output and keep prices high. O Collateral O A cartel O A monopoly O An oligopoly
- Please no written by hand solution Suppose two firms compete in quantities (Cournot). Market demand is given by P = 260 − 2Q, where Q = q1 + q2. Both firms have constant MC = AT C = 20.a. Solve for the Cournot equilibrium and find the Cournot equilibrium profits for each firm.b. Now suppose the two firms formed a cartel. What would be the profits for each firm then?c. If firm 2 sticks to the cartel agreement (quantity), then what is the best response for firm 1 (if firm 1 were to deviate)? Find the profits for firm 1 from deviating.d. How large must the probability-adjusted discount factor be in order for the cartel to be stable?e. How would the answer to part d. change if the two firms were competing in prices (Bertrand)?Please answer all steps, because no too much detailed answers required.Only typed answer In a duopoly, each firm has marginal cost MC = 100, and market demand is Q = 500 - 0.5p. Assuming average cost is the same as marginal cost. In which oligopoly, Cournot or Stackelberg, do firms have more market power? a. Cournot since the Lerner Index in the Cournot model is twice as much as that in the Stackelberg model. b. Stackelberg since the Lerner Index in the Cournot model is twice as much as that in the Stackelberg model. c. Cournot since the Lerner Index in the Cournot model is about 1.08 times as much as that in the Stackelberg model. d. Stackelberg since the Lerner Index in the Cournot model is about 1.08 times as much as that in the Stackelberg model.Suppose that there are two firms in a market, firm 1 and firm 2. The marketis declining in size. The game starts in period 0, and the firms can compete in periods 0, 1,2, 3, ... (i.e., indefinitely) if they so choose. Duopoly profits in period t for firm 1 are equalto 105 −10t, and they are 10.5 −t for firm 2. Monopoly profits (those if a firm is the onlyone left in the market) are 510 −25t for firm 1 and 51 −2t for firm 2. At the start of eachperiod, each firm must decide either to “stay in” or “exit” if it is still active (they do sosimultaneously if both are still active). Once a firm exits, it is out of the market forever andearns zero in each period thereafter. Firms maximize their (undiscounted) sum of profits.What is this game’s subgame perfect Nash equilibrium?
- Two firms with differentiated products are competing in price. Firm A and B face thefollowing demand curves: Q_A = 70 − 2P_A + P_B and Q_B = 120 − 2P_B + P_Arespectively. Assume production is costless.a. Give equations for and graph each firm’s reaction curve.b. If both firms set their prices at the same time, what is the Nash equilibriumprice, quantity, and profit for each firm?c. Suppose A sets its price first and then B responds. What price and quantitydoes each firm set now? Is it advantageous to move first?d. Compare the profits from part b and c. Which firm benefits more from thesequential price choosing? (Please do b-d, thanks :))Explain what is Oligopoly and duopoly? Are firms in Oligopoly large firms or small firms? What is product differentiation, price discrimination and profit maximization under Oligopoly? Give two examples each of product differentiation and price discrimination. What is the optimum point of production and minimum cost point of a firm under Oligopoly? Explain and draw AR and MR curves as (a) kinked demand curve; (b) Collusion (cartels) and (c) Price leadership model.The following diagrams illustrate an industry under oligopoly consisting of 10 equal-sized firms, and a particular firm in that industry. Each of the firms produces an identical product. (d) If the other firms stick to this output, how much would an individual firm be tempted to produce if it wished to maximise its own profit at the agreed price? (e) If it undercut the cartel price, what price and output would maximise its profit (assuming the other members did not retaliate)?
- Suppose oil production in the Gulf of Mexico was a symmetric horizontal oligopoly in Cournot competition. Assume there are two producers, each with a constant marginal cost of production of $50 per barrel. Let the demand function for oil in the region be D(p) = 12000 – 20p, where demand is measured in barrels per day. (You will need to calculate inverse demand from demand before moving on). What would the perfectly competitive equilibrium price and quantity be? What would be the consumer surplus and producer surplus? Draw each firm’s residual inverse demand curve. Calculate the Cournot-Nash equilibrium price and quantity. What is the total consumer surplus, total producer surplus across the two firms, and deadweight loss?Two dairy farmers produce milk for a local town with local milk demand given by Q=100-1/3P(P denotes price measured in Rands, Q denotes the quantity measured in liters). Both farmers have the same cost function given by TC=150+2q(wheredenotes output).(a) Determine the reaction function of each farmer. (b) Find the Cournot-Nash equilibrium. (c) Calculate profits for each farmer (d) Suppose that both farmers decide to form a cartel, determine profitsfor each farmer under the cartel (e) What output should farmer 1 produce if he/she expects their rival to produce 20 units? (f) Calculate the profits if farmer 2 decides to break the cartel agreement (g) Does joining a cartel offer any benefits to both farmers? Justify your answer (h) What if farmer 1 is a leader and farmer 2 a follower, determine the price, quantity and profits made by these two farmers. Please solve d, e,f,g and hTwo dairy farmers produce milk for a local town with local milk demand given by Q=100-1/3P(P denotes price measured in Rands, Q denotes the quantity measured in liters). Both farmers have the same cost function given by TC=150+2q(wheredenotes output).(a) Determine the reaction function of each farmer. (b) Find the Cournot-Nash equilibrium. (c) Calculate profits for each farmer (d) Suppose that both farmers decide to form a cartel, determine profitsfor each farmer under the cartel (e) What output should farmer 1 produce if he/she expects their rival to produce 20 units? (f) Calculate the profits if farmer 2 decides to break the cartel agreement (g) Does joining a cartel offer any benefits to both farmers? Justify your answer (h) What if farmer 1 is a leader and farmer 2 a follower, determine the price, quantity and profits made by these two farmers. Please answer g and h
