One of the market structure that is best characterized by monopolistic competition is pizza market. Say Classico's Pizza is one of such producers in the local market. The demand for Classico's Pizza is: Qd = 225 - 10P and Classico's cost function is: C(Q) 0.15Q2. Determine Classico's long run level of output and price
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- The market structure of the local pizza industry is best characterised by monopolistic competition. Pizza Shack is one of the producers in the local market.The market demand for Pizza Shack is: Qd = 225 – 10P.Pizza Shack’s cost function is: C(Q) = 0.15Q^2Where Q^2 refers to q squared2. Re-write the demand function in price form:The market structure of the local pizza industry is best characterised by monopolistic competition. Pizza Shack is one of the producers in the local market. The market demand for Pizza Shack is: Qd = 225 – 10P. Pizza Shack’s cost function is: C(Q) = 0.15Q^2 Where Q^2 refers to q squared Determine Pizza Shack's profit maximizing level of output and the price charged to customers. 8. The market price for Pizza Shack at this level of output isThe market structure of the local pizza industry is best characterised by monopolistic competition. Pizza Shack is one of the producers in the local market.The market demand for Pizza Shack is: Qd = 225 – 10P.Pizza Shack’s cost function is: C(Q) = 0.15Q^2Where Q^2 refers to q squared5. Differentiate the total cost function to find marginal cost:
- The demand function for a monopolistically competitive firm's product is Q = 100 – 4P, while the firm's cost function is C = 500 + 10Q + 0.5Q2.(a) Determine the firm's equilibrium price and quantity.(b) Is the firm in long-run equilibrium? If not, what is expected to happen in the long run if the firm remains in the industry?The market structure of the local pizza industry is best characterised by monopolistic competition. Pizza Shack is one of the producers in the local market.The market demand for Pizza Shack is: Qd = 225 – 10P.Pizza Shack’s cost function is: C(Q) = 0.15Q^2NOTE: Q^2 refers to q squared1. Monopolistic competition is characterised by _______________________ and free entry and exit.There are two firms, Firm 1 and Firm 2. The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(Q1) = 10 + 4Q1 and C(Q2) = 12 + 16Q2, and the market demand curve for product is given by P = 50 – 4Q. Instructions: Use no decimals. Use the average cost to calculate monopoly profits. Do not round values if used to complete other calculations. Complete the following table. Q1 Q2 P Profits F1 Profits F2 Duopoly competition Collusion
- The market structure of the local pizza industry is best characterised by monopolistic competition. Pizza Shack is one of the producers in the local market.The market demand for Pizza Shack is: Qd = 225 – 10P.Pizza Shack’s cost function is: C(Q) = 0.15Q^2Where Q^2 refers to q squared4. Differentiate the total revenue function to find marginal revenue curve:Reproduce the numerical example from the chapter on Monopolistic Competition in the book by Krugman & Obstfeld. If you do not have the book, here is the relevant information (the model and the equations are the same as those in the slides). Consider two countries, Home and Foreign, with the following market sizes: SH = 900,000 and SF = 1,600,000. The demand function for industry i is represented by Q = S[( 1 / n − 1 / 30,000) ∙ (Pi − P)] While the total cost function is represented by TC = 750,000,000 + 5,000 ∙ Q (a) Compute the long-run equilibrium price and the long-run number of varieties in Home and in Foreign under AUTARKY. (b) Compute the long-run equilibrium price and the long-run number of varieties in the integrated market when there is FREE TRADE. (c) Compare (a) and (b) and show that both countries are better off. Now suppose that the two countries that we considered in the numerical example of the previous exercise were to integrate their automobile market with a…The Poster Bed Company believes that its industry can best be classified as monopolistically competitive. An analysis of the demand for its canopy bed has resulted in the following estimated demand function for the bed: P=1,760−12Q�=1,760−12� The cost analysis department has estimated the total cost function for the poster bed as TC=Q33−15Q2+5Q+24,000TC=�33−15�2+5�+24,000 Short-run profits are maximized when the level of output is and the price is . The total profit at this price-output level is . The point price elasticity of demand at the profit-maximizing level of output is . The level of fixed costs the firm is experiencing on its bed production is . What is the impact of a $5,000 increase in the level of fixed costs on the price charged, output produced, and profit generated? Increase No change Decrease Price Charged Output Produced Profits Generated
- The market structure of the local pizza industry is best characterised by monopolistic competition. Pizza Shack is one of the producers in the local market. The market demand for Pizza Shack is: Qd = 225 – 10P. Pizza Shack’s cost function is: C(Q) = 0.15Q^2 Where Q^2 refers to q squared Determine Pizza Shack's profit maximizing level of output and the price charged to customers. 7. Calculate the profit maximising quantity:Pizza Hut and Dominoís are considering to open a shop in a new shopping precinct in Burwood. Suppose both charge $10 for a pizza (price competition is ignored here), and the aggregate local demand for pizza at this price is Q: If both Örms open a shop in the shopping precinct, Q is shared equally between the two shops. On the other hand, if there is only one pizza shop in the shopping precinct, the total demand Q goes to that shop. The total cost function for Pizza Hut is TC P(Q) = 5Q + 6000 and the total cost function for Dominos is TCD(Q) = 5Q+ 6000: Each has two strategies: Open a shop or Not, and they make their decisions simultaneously. The payoff is zero for a firm that does not open a shop in the shopping precinct. Suppose Q= 3000: Construct a 2 X 2 payoff matrix for this entry game between Pizza Hut and Dominoís and Önd the NE of the game. Suppose Q = 2000:Construct a 2x2 payoff matrix for this entry game between Pizza Hut and Dominoís and Önd the NE of the game.…The supply chain for Pappy Van Winkle bourbon is characterized by a monopolist upstream producer and a competitive downstream retail sector. Final consumers’ demand for Pappy Van Winkle bourbon is given as: P=140-2Q, where Q is the number of bottles that are purchased each day. The marginal cost of production (i.e., performing the manufacturing function) can be written as: MCM=30+2Q, and the marginal cost of performing the retail function is MCA=20. Suppose that the two firms are not vertically integrated. Construct the final consumers’ demand curve.
