Like monopolists, oligopolists are aware that an increase in the quantity of output always Question 8 options: a) reduces their revenue. b) reduces productivity. c) reduces their profit. d) reduces the price of their product.
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Like monopolists, oligopolists are aware that an increase in the quantity of output always Question 8 options: a) reduces their revenue. b) reduces productivity. c) reduces their profit. d) reduces the
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- A monopolist earns $70 million annually and will maintain that level of profit indefinitely, provided that no other firm enters the market. However, if another firm enters the market, the monopolist will earn $70 million in the current period and $32 million annually thereafter. The opportunity cost of funds is 12 percent, and profits in each period are realized at the beginning of each period.a. What is the present value of the monopolist’s current and future earnings if entry occurs? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.1. TopGames buys the rights to sell a certain video game title worldwide. top games pay $400,000 for this right and the marginal cost of providing the video game download is zero. TopGames’ economist realizes they have two groups of customers: the 2,000 hard-core fans of this game who will pay up to $150 a year to be able to play this game; and the 10,000 casual gamers who will pay up to $50 a year to play this game. If TopGames can NOT price discriminate, what is its profit-maximizing price? What is its profit? a. Price = $50; Profit = negative $100,000 b. Price = $50; Profit = $300,000 c. Price = $150; Profit = $100,000 d. Price = $150; Profit = $500,0002. TopGames buys the rights to sell a certain video game title worldwide. top games pay $400,000 for this right and the marginal cost of providing the video game download is zero. TopGames’ economist realizes they have two groups of customers: the 2,000 hard-core fans of this game who will pay up to $150 a year to be able to play this…Hello! I just want to ask for help whether the answers in the given pictures are correct. If it's not, please help me recheck and resolve it. Please refer to the given pictures below for the answers. After verifying the given answers shown in the subsequent picture, PLEASE ANSWER LETTER D. SITUATION/PROBLEM: Consider a price discriminating monopolist facing two markets for its good. The demand equations faced by the monopolist and its cost function are: Market 1: Q1 = 55 - P1 Market 2: Q2 = 70 - 2P2 Cost Function: TC(Q) = 100 + 5Q, where Q = Q1 + Q2. a. If the monopolist can maintain the separation between the two markets, calculate the optimal output level that the firm should produce for each market to maximize profits. b. Determine the prices the monopoly should charge in each market, and calculate the profit of the monopoly. c. Construct a graph to represent your findings in item # 3.a and #3.b. d. If the monopolist cannot maintain the separation between the two…
- Consider any market that has a demand curve given by: Qd = 125 - 0.4P. Being the total quantity demanded in the market, given the quantity in millions of units and the market price, calculated in monetary units. Imagine that there are 2 Cournot oligopolists operating in this market that have Cmg = CVme = 2. About this market, the question is: a) What is the reaction curvature of the oligopolists? b) What will be the production of each of the companies? c) What is the sale price for oligopolists?Suppose both a monopolist and a perfectly competitive firm are producing in theirrespective markets at a point where marginal cost is $8 and marginal revenue is $10. Whatshould the profit-maximizing firms do? Group of answer choices Both the monopolist and the perfectly competitive firm should increase output until MC= MR. The monopolist should keep producing at this level but the perfectly competitive firmshould decrease output until MC = MR. The monopolist should increase output but the perfectly competitive firm should shutdown. Both the monopolist and the perfectly competitive firm should decrease output until MC= MR.Exercise 3: merger example Algoma Steel Inc. and Stelco Steel Inc. Merger? Suppose you work at the Bureau and your task is to assess a proposed merger between Algoma Steel Inc. and Stelco Steel Inc. For simplicity, these are the only two firms in Canada. The cost of this merger is that the two firms will become one joint firm, or the duopolists become the monopolist. This is likely to limit consumer choices and the equilibrium price is likely to rise. However, this merger is likely to increase economies of scale, or production cost will fall. From existing studies you know the following information, and P is the price per ton of steel and Q is the number of tons of steel. Demand for steel: P = 1,800 - Q Marginal revenue: MR = 1,800 - 2Q Supply of steel: MC = ATC = 600, identical across the two firms. Case #1: Before Merger - Cournot duopoly - the government does not intervene The total surplus (TS), defined as the sum of consumer surplus and producer surplus, is equal to…
- Ugly Dolls Inc. (UD) is a firm in Mytown that sells its products on a market under monopolistic competition. The cost function of UD is represented by TC = 100+10Q. Lately, because of the UD is making a big amount of profit, some firms enter the market to compete. Assume that Mytown engages in free trade in the dolls markets with Yourtown, who also faces a market with monopolistic competition. Because of this we can expect that, (a) The numbers of firms operating in this market will not change. (b) At equilibrium the profit of firms will increase. (c) The quantity of types of dolls available to consumers will increase. (d) All the above answers are correct.Q-3: A monopolist sells in 2 markets and produces in 1 factory. Although the monopolist can charge difference prices in the two markets, it must sell all units within a market at the same price.a) Suppose this monopolist does not have a marginal cost (M C = 0). If demand in market 1 is X1(p1) = a1 −b1p1 and demand in market 2 is X2(p2) = a2 −b2p2, set up the monopolist’s profit maximization problems and solve for the market prices that result in each market.b) Under what conditions on a1, b1, a2, b2 from above will the monopolist not price discriminate?c) If demand in market i, where i = 1 , 2, is instead Xi(pi) = aipi−bi and the monopolist has some constant marginal cost of c, where c > 0, set up the monopolist’s profit maximization problem and solve for the market prices.d) Under what conditions on a1, b1, a2, b2 from above will the monopolist not price discriminate?Part A Suppose that the monopolist can produce a good with total cost TC = 24Q. Assume also that hemonopolist sells its goods in two different markets separated by some distance. The demand curves inthe first market and the second market are given by Q1 = 120 - P1/2 and Q2 = 360 - 3P2. If themonopolist can maintain the separation between the two markets, what level of output should beproduced in each market, and what price will prevail in cach market? Why are the two prices different?Verify the Lemer Index for cach market. Part B Suppose a monopoly faces a demand curve by Q = 154 - P/3. The monopolist has two plants. The firsthas a total cost function given by TC1, = 3Q21 and the second plant's total cost function is given byTC2 = 2Q22 How much total output will the monopoly choose to produce and how will it distributethis production between its two factories in order to maximize profits? Find monopolist's profits.
- 1. When a monopoly advertises, the goal is to _____ because _____. Group of answer choices increase its demand as a share of market demand; the monopoly faces a significant portion of market demand increase market demand; the monopoly faces the entire market demand increase market demand; the monopoly produces a product that is identical to the output of all other sellers in the market increase its demand as a share of market demand; the monopoly faces a small portion of market demand 2. If given a choice, a person would prefer to experience the situation of which of the following families? Group of answer choices a family with income equal to the world poverty line a family with income equal to the United States poverty line a family with income double the world poverty line a family with income equal to the poverty line in the United States in 1970 3. A business using its bargaining power as a major buyer of labor to pay lower prices, including lower wages,…true or false The oligopolist reduces the price of the good by 10%, but the competitors reduced their prices by 8%. As a result, the oligopolist only attracts only an additional 5% consumers from his competitors, This will reduce the total revenue of the oligopolist.Exercise A.3 Compare the competitive equilibrium with that of the first-degree price discriminating monopolist. Indicate the similarities and differences that exist in prices, quantities produced, consumer surplus and loss of efficiency between both situations. Represent graphically assuming that the marginal cost is constant