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A: Answer to the question is as follows :
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A: To find : Major difference between perfect competition and monopolistic competition
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A: Monopolistic competition is a form of market where there are many firms which provides similar…
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- Please no written by hand and no emage Two firms compete in a homogeneous product market where the inverse demand function is P = 20 −5Q (quantity is measured in millions). Firm 1 has been in business for one year, while Firm 2 just recently entered the market. Each firm has a legal obligation to pay one year’s rent of $1.6 million regardless of its production decision. Firm 1’s marginal cost is $2, and Firm 2’s marginal cost is $10. The current market price is $15 and was set optimally last year when Firm 1 was the only firm in the market. At present, each firm has a 50 percent share of the market.Determine the current profits of the two firms. Firm 1's profits: $Firm 2's profits: $What would each firm’s current profits be if Firm 1 reduced its price to $10 while Firm 2 continued to charge $15?Firm 1's profits: $Firm 2's profits: $Suppose that, by cutting its price to $10, Firm 1 is able to drive Firm 2 completely out of the market. After Firm 2 exits the market, does Firm 1 have an…Ilsa Fast raises sheep and sells wool at the market. The wool she sells is identical to her competition. The market price of wool is $1.45 per pound. What is Ilsa’s marginal revenue? Group of answer choices Greater than $1.45 per pound $1.45 per pound zero Cannot be determined with this informationAn industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600. According to the general rule of thumb, the HHI of this industry implies that the market structure is: a. competitive. b. noninclusive. c. monopoly. d. noncompetitive.
- community surplus is maximized (i.e. Pareto optimality is achieved) when: a market is in equilibrium. the producer surplus is greater than the consumer surplus. a market is imperfectly competitive (e.g. a monopoly). a price floor is established.Because of producer–producer rivalry, the price will tend to Multiple Choice rise up to the maximum price the consumers are willing and able to pay. be the same as the monopoly price. be driven to a lower price. be the same as the competitive price.In competitive equilibrium.. (choose all that apply) economic surplus is maximized deadweight loss is maximized marginal benefit = marginal cost everyone is better off
- Pure monopoly is able to exist the firm’s product is better that the substitutes that are available in the market. True or falseA student in a managerial economics class calculated the four-firm concentration ratio and HHI for industries A and B. What is the proper conclusion she can draw from the following findings? Industry A Industry B Four-Firm C 0.9 1 HHI 3,200 2,500 Multiple Choice C4 is higher for industry A while the HHI is higher for industry B. This inconsistency must be due to a calculation error. The market power of firms in industry A is greater than that in industry B. Neither industry is perfectly competitive. Industry B is a monopoly.Q)Firm A and B are Cournot competitors, who produce good x. Both firms have zero cost and demand is X = 215 – P, where P is market clearing price. If firm produces 90 units, then what is the optimal amount of output for firm A to produce. solve our if you know correct and clearsolution.
- Please answer these questions Ques : Total industry sales are $105 million. The top four firms account for sales of $15%, 12%, 10%, 8% respectively. What is the three-firm concentration ratio? Ques :;An example of a barrier to entry in a market is: Lack of profitable Increasing cost of Inelastic market Government licensing A profit-maximizing monopolist sets: Price where MC=MR. Produces output where MC=MR. Both A and B are Neither A or B isPrice is set in a market by a dominant firm price leader (L = Leader). Total Market Demand is P = 10,000-5*QT.QT= 2,000 - .20*P.The dominant firm’s total cost is TCL= 50*QL + 1.5*QL2. The dominant firm’s Quantity Demanded is QL= QT – QF. The competitive fringe supply isSF= PL = 50 + 2QF;QF = -25 + .5*P.Profit maximizing price set by the dominant firm will beYou make delicious cupcakes that you mail to customers across the country. Your cupcakes are so unique and special that you have a great deal of pricing power. Your customers have identical demand curves for your cupcakes, and a representative customer’s demand curve is shown below. (It’s not needed, but the demand curve equation is P=5-0.2Q or Q=25-5P.) Suppose your MC=$1/cupcake, whether you produce lots or just a few cupcakes. To keep things simple, suppose there are no fixed costs, so FC=0. a) Acting as a monopolist, show the standard pricing analysis on the graph below that identifies your profit-mamximing price and quantity for your representative customer. Shade areas representing your profit and CS. (PS and profit are the same here since FC=0). b) Suppose you offer a quantity discount: first 10 cupcakes at $3 each and any cupcakes over 10 are offered at a discounted price. What discount price will maximize your profit? Show this quantity discount arrangement on your graph…