Next, consider a case that the integrated firm produce the product and sell directly to consumers. Suppose the market demand is q = 70 - p. Marginal costs are constant and equal to 10. Find the optimal retail price (p): Find the quantity demanded (q) that corresponds to p Find the firm's profit (n) that corresponds to p
Q: PRICE LEVEL 125 120 115 110 105 100 95 90 85 80 75 + AS LRAS 20 0 10 30 40 70 80 90 100 50 60 OUTPUT…
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- Part 5 6 7 8 9 solution needed Suppose that market demand is linear, q = 70 - p. Marginal costs are constant and equal to 10. The upstream firm, which is a manufacturer, does not sell directly but through a single downstream firm, which is a retailer. The manufacturer set the wholesale price w at stage 1. At stage 2, the retailer who is assumed not to incur any costs except wholesale price (w), observes the wholesale price and sets the retail price p. 1.Find the optimal wholesale price (w*): 2.Find the optimal retail price (p∗): 3.Find the quantity demanded (q∗) that corresponds to p∗: 4.Find the manufacturer’s profit (π*M) that corresponds to p∗: 5.Find the retailer’s profit (π∗R) that corresponds to p∗: 6.Find the overall channel profit (Π∗ = π*M+ π*R): Next, consider a case that the integrated firm produce the product and sell directly to consumers. Suppose the market demand is q = 70 - p. Marginal costs are constant and equal to 10. 7.Find the optimal retail price (pi): 8.Find the…Take a market with just one business and high obstacles to entry, where P = 100 - 2Q and MR = 100 - 4Q describe the demand curve. Assume that overall expenses are zero (hence, marginal cost is equal to 0). What would the going rate be in this marketplace? P = 20 P = 30 P = 50 P = 40Suppose 4Sisters is a patented vaccine. Her producer is facing a linear demand function for 4Sisters. She manufactures at a constant marginal cost of $20. Reports indicate that she produces 12,000 units of vaccine. She charges a unit price of $400. She is making a positive economic profit of $1,500,000. Draw a well-labelled diagram to indicate the output decision, pricing decision, economic profit, and the resultant deadweight loss in the market for 4Sisters. Indicate key figures with reference to the above given information.
- A firm with market power has an individual consumer demand of Q = 20 − 4P and total costs of C = 2Q. What is the optimal amount of this product to package in a single block? a. 12 b. 10 c. 6 d. 8Consider an imperfectly competitive service provider, Muscat Automotive Repair Services (MARS), whose total cost of production is C = 30Q+0.165Q2. Also, MARS faces two different market segments, A and B, whose demands can be linearly expressed as QA = 240 - PA and QB = 120 - 0. 5PB. (Hint: the marginal cost is the slope of the total cost function).1. Under a single-price strategy (no market segmentation), find MARS’s profit-maximizing price and quantity.A particular item in the Picasso Paints product line costs $7 each tomanufacture. The fixed costs are $28,000. The demand function isq = -500p + 30,000 where q is the quantity the public will buy at a given price, p. 1) Write the expense function in terms of p.2) How much profit would the firm make if the price was $12?3) What is the revenue equation?
- Consider a market with just one business and high obstacles to entry, where P = 100 - 2Q and MR = 100 - 4Q describe the demand curve. Assume that overall expenses are zero (hence, marginal cost is equal to 0). What would the going rate be in this marketplace?P = 20P = 30P = 50P = 40Duck Donuts sells plain and premium donuts. Premium donuts are plain donuts with special toppings. Demand for plain (PL) donuts is: PPL = 3 - 0.2QPL and Demand for premium (PR) donuts is: PPR = 4.4 - 0.4QPR The marginal cost for each is: MCPL = 0.20 MCPR = 0.40 Which of the following statements is true? a.Plain donuts generate more Total Revenue than premium donuts b.More premium donuts will sell than plain donuts c.Only premium donuts should be sold d.Only plain donuts should be sold e.Premium donuts generate more Total Profit than plain donutsA price-taking firm in a competitive industry of a good that is continuously divisible (like sand) has a total cost function TC(Q) = 3.5Q^2 + 100Q + 500. The market price for the good is p = $240. a: Carefully write out this firm’s profit maximization problem, using the particulars of thisproblem. b: Give the marginal condition (equation) that characterizes the solution to this problem. Solvethis condition for the firm’s optimal quantity Q*. c: Calculate the firm’s maximized profit. d: On a graph with quantity on the horizontal axis, neatly plot the marginal revenue curve andmarginal cost curve. Show Q* on your graph. e: Label areas on your graph using a, b, c, etc. and indicate the areas that correspond to totalrevenue and variable cost.
- Demand is assumed to be unit-elastic: X(p) = 1/p. There are m ≥ b2 firms operating in the market with constant marginal cost levels c1 ≤ c2 ≤ ……. ≤ cm. They engage in Cournot competition. a. Show that the equilibrium price implies Lerner indexes Where si is the market share of firm i. b. Using the equilibrium price, show that the profit of firm i is equal to (si)2. c. Show that the industry profit is equal to the Herfindahl index H = Σi(si)2. d. What is the effect of a specific taxt on equilibrium price? How does this tax affect the industry profit and the Herfindahl index?A profit maximizing firm produces a single product that it sells in two distinct markets 1 & 2. The demand and cost functions for the firm are given below. Q1 = 21- 0.10P Q2 = 50 - 0.40P TC = 2000 + 10Q where Q = Q1 + Q2Find the equilibrium quantities transacted and the prices charged in each market.An upstream firm (U) sells an input to a downstream firm (D) which resells it to consumers. The marginal cost of U is 4. Each unit is sold by U to D at a transfer price r. Requirement final is p = 12 - y. a) Suppose U and D are separate firms. Find r, y and p. b) Suppose U and D are one integrated firm. Find p and y. c) Suppose the firms are not integrated, but firm U uses a two-part tariff: it requires payment of r for each unit sold to D; in addition, it requires payment lump sum of T. Find the value of r that U will choose. Find the minimum and maximum values by T. d) Suppose the firms are not integrated, but U imposes a resale price control on firm D. Find the value of r that U will choose, and the constraint that it will impose on the price final p Plzz give the answer of all questions.