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P = 53-Q
Q= q1+q2
MC =AC = 5
Solve for the cartel .
a) cournot -Nash equilibria
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- Producers in three countries have formed a cartel to sell a highly-priced product. Suppose the world demand for the product is consistent with the equation: P=80-0.005QT NB: QT is the total cartel sales. The producers have managed to maximise profit at a price of R70 per unit. Suppose the members have the following total cost functions; Member 1: TC=7382 + 10Q + 0.05Q2 Member 2: TC= 9374 + 20Q + 0.02Q2 Member 3: TC=7432 + 30Q + 0.03Q2 : Derive: a) Marginal revenue b) Output of member 1,2 and 3 c) Total cartel output.P = 53-Q Q= q1+q2 MC =AC = 5 Solve for the cartel a) stackelberg equilibriaWould you expect the kinked demand curve to be more extreme (like a right angle) or less extreme (like a normal demand curve) if each firm in the cartel produces a near-identical product like OPEC and petroleum? What if each firm produces a somewhat different product?
- Two dairy farmers produce milk for a local town with local milk demand given by Q =100-0.3333333333P(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) Does joining a cartel offer any benefits to both farmers? Justify your answerSuppose Farmer Smith from Kansas and Farmer Jones from Missouri agree to restrict their combined output of wheat in an attempt to increase the price and profits. How likely do you think the Smith–Jones cartel is to succeed? Explain.A two-firm cartel producing industrial diamonds faces the following demand function: Q=120-10P The total cost function of each firm is TC1 = 4Q1 + 0.1Q12 and TC2 = 2Q2 + 0.1Q22 a, Find the output and profit of each firm and total profit of cartel that maximize total profits b, Find the output and profit of each firm and total profit of cartel that maximize total revenues
- Which of the follow industries is the best example of an existing cartel? Group of answer choices Microsoft and Apple—two of the largest computer manufacturers Verizon and AT&T—two of the largest American mobile phone service providers GM, Chrysler, Ford—The big three American automobile companies OPEC, the Organization of Petroleum Exporting CountriesIn a Cournot duopoly, each firm has marginal cost MC=20, and market demand is Q=100-0.5p. What are the best response functions of each firm? What is the best output level for each? How does the total output level compare to the cartel output level?There are two firms in the blastopheme industry. The demand curve for blastophemes is given by p=2100-3q. Each firm has one manufacturing plant and each firm i has a cost function C(qi)=qi2 , where qi is the output of firm i. The two firms from a cartel and arrange to split total industry profits equally. Under this cartel arrangement, what will they do if they want to maximize joint profits?.
- Why has the OPEC oil cartel succeeded in raising prices substantially while the CIPEC copper cartel has not? What conditions are necessary for successful cartelization?OPEC is a petroleum cartel, a group of oil producing countries whose objective is to coordinate and unify petroleum policies. What type of market structure is a cartel?Would you expect the kinked demand curve to be more extreme (like a right angle) or less extreme (like a normal demand curve) if each firm in the cartel produces a near-identical product like petroleum? What if each firm produces a somewhat different product? Explain.
