O O O O is not useful to a dominant firm if it could eliminate all its rivals through a price war. is an arrangement in which one firm in the market sets a price that the other firms matc occurs when a group of firms agree to limit competitive forces in the market. is when a firm makes a noncooperative decision to raise its price!
Q: Calculate the benefit/cost ratio at i-5% for a highway project. The first cost is $150,000 and O&M…
A: B-C ratio is the benefit to cost ratio. B-C ratio is calculated by dividing the net cost from net…
Q: Does it make sense that accounting for the negative externality results in a higher price? Explain…
A: Externalities are described as costs or advantages incurred by a producer but not covered by the…
Q: NSWER THE FOLLOWING QUESTIONS: (Detailed responses (4-5 paragraphs for each question. No short…
A: Disclaimer: - Since you asked multipart question, we are solving first 3 subparts as per guidelines.…
Q: a) Set up the Expenditure Minimization Problem (EMP) or Dual Problem and construct the Lagrangian…
A: To find the Hicksian demand functions we set up the expenditure function and then minimize it using…
Q: You are considering subscribing to Hulu. You are willing to pay up to $12 per year for a…
A: The excess of a product's social value above its real price is known as the "consumers' surplus,"…
Q: QUESTION 16 The market for breakfast cereals is dominated by four producers: Kellogg's, General…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: How did the ECONOMIC factor of the PESTELE model lead Trump when assessing TikTok as a threat to…
A: The abbreviation PESTEL refers for political, economic, social, technical, legal, and environmental…
Q: Suppose that the restaurant industry in Honolulu is monopolistically competitive and is currently in…
A: Dear Student as you have posted question with multiple sub-parts but as per the policies and…
Q: Deposits equal Balance Sheet ASSETS Reserves (Required) $ 50,000 Loans Reserve Ratio $30,000.…
A: Reserve is the part of deposit that is kept by the banks. Required reserve is calculated by…
Q: The General Hospital is evaluating new office equipment offered by three companies. MARR is 8%.…
A: Company A Company B Company C First Cost 500 600 700 Annual Benefit 130 115 100 Salvage…
Q: b. a) Instead, suppose that the firm holds monopsony power in the market for labor and faces the…
A: A monopsony firm is the only buyer in the economy. In this case, the firm is the only buyer of labor…
Q: Consider a market with four firms. Suppose the first firm has a 54% market share, the second firm…
A: Herfindahl-Hirschman Index (HHI) is the method used to calculate the market share. The HHI is…
Q: Consider a company operating in a competitive market. The company sells units of output and receives…
A: When more labour is used, the overall production increases, as shown by the marginal product of…
Q: If the GDP deflator rises from 185 to 190, what is the rate of inflation between the two years? A.…
A: In economics, inflation refers to a general increase in the prices of goods and services in an…
Q: Consider a monopolistic market with demand function: P = 36 -0.5Q The monopolist's marginal cost…
A: Given, Demand Function: P=36-0.5Q Marginal Cost: MC=$2 Total Cost: TC=4+2Q
Q: dr. phelps (Edmund Phelps) claims the US is becoming more corporatist -- which of the four models…
A: Let’s first understand the term Market Structure: “Market Structure” in simple terms refers to a…
Q: Type out the correct answer and give proper explanation of each n every option step by step within…
A: Fixed exchange rate regime refers to the ties of a nation's currency to another currency’s exchange…
Q: The government is considering raising the tax rate on labor income and asks you to report on the…
A: The number of people willing to work at various wage rates is referred to as the labour supply. It…
Q: A financial market where economic agents meet in one central location is known as an over the…
A: Financial markets refer to any marketplace where the trading of assets such as bonds, stocks,…
Q: Describe the condition which a profit-maximizing monopolist can be efficient in terms of resource…
A: Profit maximization is a business firm's tendency to use the most efficient methods and equalizing…
Q: Why do exports increase in the long-run when currency depreciates, according to the J-curve? OA.…
A: J-curve is a theory in economics that explains that given certain assumptions when there is…
Q: When are firms likely to enter an industry OA Fims will exit an industry when price is greater than…
A: Economic profit refers to the difference between the total revenue derived from the sales of a good…
Q: d. Does this production function have constant, increasing, or decreasing returns to scale e. What…
A: Production function:q= fL, K = L0.2 K0.8q = OutputL = LaborK = Capital
Q: If households increase savings in their bank accounts, therefore increasing investment spending. A.…
A: Savings represent supply of lonable funds and Investments represent demand for lonable funds. At…
Q: In 2008, American Airlines became the first major airline in the US to announce they would begin…
A: Sunk costs are expenses that have already been incurred, hence they have no bearing on decisions…
Q: Quantity of kilowatt hours supplied: [ nstructions: Enter your response rounded to two decimal…
A: In a competitive market, a firm produces higher output than under a monopoly. The price charged by a…
Q: Suppose there is no population or technological growth. Define k as the capital-to-labor ratio. If…
A: The Solow growth model gives steady-state points at which all key variables of the model are growing…
Q: If the firms in a Courot duopoly merge forming a monopoly, the effect on price, profit, and other…
A:
Q: The permits the federal government to protect certain products of the mind, just as much as it…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: When the Fed raises the required reserve ratio, the banks' excess reserves ________ and the money…
A: Required reserve ratios are the one which the bank should kept it with themselves rather than…
Q: 3. Answer all parts (a)-(e) of this question. Consider the following production function: Q = 3K3…
A: MPL(Marginal product of labor) is the extra/additional output that the firm receives from employing…
Q: The portion of the demand curve that maximizes a monopoly profits operates in the: Select one: O a.…
A: The profit-maximizing choice monopolist produces at the quantity where marginal cost is equal to the…
Q: 5. Monopoly outcome versus competition outcome Consider the weekly market for gyros in a popular…
A: A monopoly is a market structure when there is only one seller present. Due of the lack of a close…
Q: The demand curve for U.S. dollars is downward sloping because an increase in the foreign exchange…
A: The demand curve for the US dollar depicts the inverse relationship between the foreign exchange…
Q: ech firms produce goods and services from labor and energy. The total cost in dollars to produce y…
A: A perfectly competitive firm is a firm which operates in a perfectly competitive market. And firm…
Q: Which one of the following statements is incorrect? a) Equilibrium in a perfectly competitive…
A: The labor demand curve depicts the inverse relationship between wage and quantity of labor demanded…
Q: If a central bank wants to make sure that its policy actions are successful in manipulating interest…
A: Central banks use tools such as rates of interest to make an adjustment to the supply of money to…
Q: 3. Consider a model of Cournot duopoly. Two firms produce an identical product. The inverse demand…
A:
Q: Albin’s inverse demand function for pretzels is p( q) = 49 – 6 q, where q is the number of pretzels…
A: Consumer Surplus is the difference between maximum price that a consumer is willing to pay and…
Q: 12. Over the last decade, robotic-drone a research and development company has researched in new…
A: Given information $90M sales annually with 20% probability. $76M sales annually with 45%…
Q: Gilberto's reservation prices for tubs of hummus are given below. Q (Tubs) 1 2 3 4 5 Reservation…
A: The maximization of utility is at the point where the marginal utility per dollar (i.e. marginal…
Q: Company ABC is considering investing in a project whose initial cost is $186000. It saves $42000 in…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: The required reserve ratio is 10%. The money multiplier is Group of answer choices 1. 9 10 0.1.
A: Money multiplier is the increase in the money supply. Suppose if one dollar increase in monetary…
Q: The following are key features of a monopoly EXCEPT: Select one: O a. barriers to entry O b.…
A: Monopoly is the market structure where there is only a single seller of the good in the market. This…
Q: Explain how adverse selection leads to market failure. Give a hypothetical example/situation.
A: Moral hazard in a contract is when one party is willing to take on more risk in order to receive…
Q: An economist estimated that the cost function of a single-product firm is: C(Q) = 90 + 30Q + 25Q2 +…
A: Fixed cost is the cost that doesn't change with the increase or decrease in quantity. Average fixed…
Q: Price 180 168 156 144 132 120 108 96 84 72 60 48 36 24 12 0 0 36 72 108 144 180 -P 216 252 288 324…
A: A single company typically manufactures and/or supplies a specific good or service in a monopoly…
Q: Mr. Toni bought a plot of land for investment. The following the following functions: V(t) = 100et…
A: A plot of land is bought by Mr. T for investment purposes. The value of that plot continues to…
Q: The biological relationship between the growth for the fish population and the size of the fish…
A: g = 15S(1-S/5) -> relationship between growth for fish population and size of fish population b…
Q: Compute marginal utilities and marginal rate of substitution for each of the utility functions given…
A: Marginal utility is the utility gained by consuming one more unit of a good. It is calculated as…
Step by step
Solved in 3 steps
- Brand X is one of many firms in a competitive industry where each firm has a constant marginal cost of 2 dollars per unit of output. If marginal cost for Brand X rises to 4 dollars per unit and marginal costs of all other firms in the industry stay constant, by how much does the price in the industry increase? a. 2 dollars b. 1 dollar c. 0 dollar d. 2/n, where n is the number of firms in the industry e. None of the above.Please refer to the figure. When there are many identical companies in the market, the small business owner will take the market equilibrium price at $____ and its MR will be constant at $____ (Note: this is about a competitive market player) A) 2;2 B)3.5;3.5 C)4;4 D)6.5;6.5Firm Market Share (%) A 40 B 30 C 20 D 5 E 5 Refer to the data. If Firm B merged with Firm E, the industry's four-firm concentration ratio would ____ and its Herfindahl index would ____. Multiple Choice rise; rise fall; rise remain the same; rise remain the same; fall
- 10Two firms produce differentiated products. The demand for each firm’s product is as follows: Demand for Firm 1: q1 = 20 – 2p1 + p2 Demand for Firm 2: q2 = 20 – 2p2 + p1 Both firms have the same cost function: c(q) = 5q. Firms compete by simultaneously and independently choosing their prices and then supplying enough to meet the demand they receive. Please compute the Nash equilibrium prices for these firms.(Cournot competition with different marginal costs) Our best estimate for total marketdemand in a given market is P 1000-2Q. Two firms (1 and 2) are competing in this market in quantities, choosing Q1 and Q2 simultaneously. Firm 1 has marginalcost equal to c1 = 100 and Firm 2 produces at marginal cost c2 = 200. (a) Write down the profits of both firms and and their best response functions. (b) Find the Cournot - Nash equilibrium in quantities, and calculate equilibrium profits for both firms. (c) Suppose that each firm has the option, at a previous stage, to invest in an R&D project that will reduce its marginal cost of production by 50% if successful. What is the value of this innovation to each firm? Given that R&D costs and successprobabilities are equal, which one has greater incentives to invest in R&D ? You can think in terms of per - period profits to set aside timing issues.You are the manager in a market composed of eight firms, each of which has a 12.5 percent market share. In addition, each firm has a strong financial position and is located within a 100-mile radius of its competitors.Instruction: Enter your responses rounded to the nearest penny (two decimal places).a. Calculate the premerger Herfindahl-Hirschman index (HHI) for this market.b. Suppose that any two of these firms merge. What is the postmerger HHI?c. Based only on the information contained in this question and on the U.S. Department of Justice Horizontal Merger Guidelines described in this chapter, do you think the Justice Department would attempt to block a merger between any two of the firms?multiple choice It likely will not. It may, but will likely consider other factors as well. It likely will.
- Firm Market Share (%) A 20 B 20 C 20 D 20 E 10 F 10 The Herfindahl index for the industry described in this table is Multiple Choice 80. 1,800. greater than it would be if there were only four firms in the industry. 1,600.Suppose that firms A and B have the same product in the same market, where Qd = Qa + Qb = 300 - 2p is demand And the firms have a simple cost curves of TCa = 5Qa and TCb = 10Qb Find Cournot Equilibrium & Find the Stackelberg equilibrium if A is the leader Thank you!The following question pertains to ologopoly pricing. a. The following question pertaihs to dominant firm price leadership. Suppose a dominant firm has determined the price for its industry. Then suppose there is an increase in hte price of a substitute product. How will the dominant firm's price, dominant firm's quality, and the fringe firms' quality be affected? Please provide an explanation.
- Suppose two firms face market demand of P=150-Q, where . Both firms have the same unit cost of C, C= 22. Assume the firms compete a la Stackelberg. Firm 1 is the leader and Firm 2 is the follower in this market. What is the follower’s total revenue function? Determine the equilibrium output level for both the leader and the follower. Determine the equilibrium market price. Determine the profits of the leader and the follower.Two firms engage in Cournot competition in the Everlasting Gobstopper industry. The price elasticity of demand is-2. Firm 1 has aconstant marginal cost of $110.00 per unit, and firm 2 has a constant marginal cost of $181.50 per unit. If the two firms are currently inequilibrium, what is firm 2's share of the market? Enter your answer as a decimal, rounded to two places if necessary.______ Please show all stepsTwo firms produce goods that are imperfect substitutes. If firm 1 charges price p1 and firm 2 charges price p2, then their respective demands are q1 = 12 - 2p1 + p2 and q2 = 12 + p1 - 2p2 So this is like Bertrand competition, except that when p1 > p2, firm 1 still gets a positive demand for its product. Regulation does not allow either firm to charge a price higher than 20. Both firms have a constant marginal cost c = 4. (a) Construct the best reply function BR1(p2) for firm 1. That is, p1 = BR1(p2) is the optimal price for firm 1 if it is known that firm 2 charges a price p2. Construct a Nash equilibrium in pure strategies for this game. Are there any Nash equilibria in mixed strategies? If yes, construct one; if no provide a justification. (b) Notice that for any given price p1, firm 1’s demand increases with p2, so firm 1 is better off when firm 2 charges a high price p2. What is the best reply to p2 = 20? What is the best reply to p2 = 0 (c) What prices for firm 1 are…
