Suppose two gas stations operate at the same busy intersection. You notice that the posted prices are almost always the same. Assuming that these firms are engaged in tacit price collusion, can we automatically conclude that there is no competition for customers between the two stations?
Q: Which of the following best describes the term annual health insurance deductible? A. the amount…
A: A deductible is a sum that a policyholder needs to pay before the insurance agency begins paying.…
Q: 2. For the three-part question that follows, provide your answer to each part in the given…
A: Purchasing power is the number of goods and services that one unit of currency can buy. The income…
Q: As a general rule, the more similar a firm's product is to those of its rivals, the more…
A: Given: The firm's product is similar to that of its rival.
Q: ) The following provides information for a game. Firm A Firm B Low Price High…
A: We have 2×2 game between teo firms A and B where both has to choose between low or high pirce.
Q: 76. If 60% financing is available on a certain income property at a loan constant of 11%, what…
A: Equity is the amount of money an owner might get if they sold anything they own.Equity may be used…
Q: A monopolist faces the demand curve P = 18 – Q, where P is measured in rands per unit and Q in…
A: Demand function: Q=18-P Inverse demand function: P = 18 – Q
Q: . Suppose we have the following information: utility function U=XY; I=200; Px=5 and Py=10. The…
A:
Q: The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the…
A: Aggregate demand is downward sloping showing inverse relationship between price and output.
Q: Mr. Juan dela Cruz borrowed P 1,000 and was able to sign a promissory note that he would pay P…
A: Given Borrowed amount = 1000 Time = 4 years Future worth = 2032.79
Q: For a firm in a perfectly competitive market, the price of the good is always A. Equal to marginal…
A: There are many buyers and sellers in a competitive market structure . Firms are free to enter or…
Q: A good's demand is given by: P = 616 - 2Q. At P = 95, the point price elasticity is: Enter as a…
A: Answer; The point price elasticity of demand is -0.182
Q: Why do high-end hotels charge for Wi-Fi connections while lower-end hotels do not? What is the…
A: Price elasticity of demand measures the responsiveness in quantity demanded of a commodity to a…
Q: ework (Ch 20) ppose the Fed doubles the growth rate of the quantity of money in the economy. In the…
A: The answers are - The inflation rate The price level
Q: 4. (20%) Depict on graph and briefly explain economic consequences of export tariff: for exporters;…
A: A tariff on goods exported from a country is known as an export tariff. Tariffs are used by…
Q: Summarize the main points of drug trafficking problems in Latin America in Depth
A: Drug trafficking can be considered one of the problems for any growing economy, there are many…
Q: ㎝ 15 2 10 Price Quantity 2 4 6 The table above shows the quantity demanded for sandwiches (per hour)…
A: Elasticity of demand is defined as type responsiveness of the quantity demand when price of the…
Q: A firm employs labour L and capital K = 10 to produce using the production function q = 60K²L²-K³L³.…
A: L = 10 K=10 q=60K2L2 q = 60*100*100 q= 600,000
Q: Suppose that the demand curve for wheat is Q=140-10p and the supply curve is Q = 10p. The government…
A: since you have asked multiple questions and according to policy we can solve only 1 question and for…
Q: Exhibit 7.5 Cost per unit q Refer to Exhibit 7.5, which shows four short-run average cost curves for…
A: Average total cost refers to total cost per unit of Output. It is a U shaped curve. It initially…
Q: GRADUATE STUDIES Practice Question 1 The table below shows the demand for a product produced by a…
A: A monopolist is a single firm in the market with no close substitutes.
Q: What is value-based- purchasing, was it successful for reducing unnecessary utilization.
A: Payments to health-care providers are linked to improved performance. This method of payment holds…
Q: 4. Us and IS graph, MP graph and LRAS/SRAS/AD graph to show the effect of a decrease in taxes on…
A: The aggregate demand curve shows the inverse relationship between the price level and the total…
Q: 7. Use of discretionary policy to stabilize the economy Should the government use monetary and…
A: Fiscal policy refers to changes in government spending and taxesMonetary policy refers to changes in…
Q: $/Q 174 125 118 80 59 48 40 m MC AVC ATC 28 W Q₁ Q₂ Q₂ Q5 total variable cost at Q₂ units of output…
A: Fixed Cost refers to the costs that are incurred even when production is zero. That is, the costs…
Q: Total cost Price (dollars per ticket) Quantity (tickets (dollars per show) per show) 20 0 1,000 Big…
A: Since you have asked multiple question, we will solve the first three subparts as per honor code for…
Q: market demand
A: Demand is defined as the quantity of the good or service demanded by a consumer at a particular…
Q: Explain Islamic Moral of Principles Consumption.
A: Introduction In Islam consumption has based on few principles: Principle of halal Principle of…
Q: Monetary policy is often more effective than fiscal policy because O It is blunter and more…
A: Answer: Monetary policy is taken by the central bank of a nation. Generally, the central banks are…
Q: Explain consumption function, with the help of a schedule and diagram (I need correct answer…
A: Consumption shows the positive relationship between the Consumption and disposable income of the…
Q: B. Richard's nickname is "No-Risk Rick" because he is an extremely risk-averse individual. His…
A: There are two states with equal probability of 0.5
Q: maintain a balanced budget during a recession, what should the government do? Group of answer…
A: Starting around 1980, there have been five such times of negative economic development that were…
Q: Three examples of oligopolies in the United States are industries that produce or sell OA. DVDs,…
A: In oligopoly marker, there is many number of buyers but only few number of sellers.There is product…
Q: Suppose the inverse demand function is P-12-Q, and cost is given by C(Q)+40 If marginal revenue is…
A: Answer; Given : MC= 4 and MR= 12-2Q
Q: Multiplying one firm’s short-run supply function to the number of firms in a specified industry will…
A: Supply function shows positive relationship between price and quantity supplied.
Q: Suppose the U.S.-EU exchange rate is $1.15 per Euro, the U.S. has 5% inflation, and the EU has 10%…
A: Exchange Rate The exchange rate is the rate at which one currency of a country is exchanged for…
Q: 1. The demand for mobile phone in Hanoi as follows: QD = 90 - 20P + 51 In which, P is mobile phone's…
A: Answer: The given demand function is: QD = 90 - 20P + 5I (Where P = phone's price at 2, I =…
Q: 4 During the mining boom, it was suggested that Australia had a two-speed economy – that is, some…
A: When one sector does extraordinarily well in comparison to another, this is known as a two-speed…
Q: O a. O b. O c. Od. O e. Increase in the Price of Leather, Increase in Income Increase in Population,…
A: The above graph shows the Demand and supply curve. The supply curve shifts from S1 to S2 reflecting…
Q: a) construct the cost schedule for a firm operating in the short run b) Graph the average variable…
A: Cost refers to the monetary value which has been spend by the producers and consumers for purchase…
Q: Your answer is partially correct. wo investments involving a virtual mold apparatus for producing…
A: *Answer: Given: Investment A: Cost = $54,900 Time = 9 years Annual operating cost = $150,000 3…
Q: 6. Supply and demand are given D = 200-20P and S=20P 40. Currently the government allows a Free…
A:
Q: Explain how these forces redefine the nature and functions of the state in the globalized world: -…
A: Disclaimer: Multi-part question. Providing answers to the first three parts. Globalisation refers to…
Q: What made Jose Rizal become a mason?
A: José Rizal is regarded as one of the Philippines' most illustrious figures. He was a political…
Q: Assume that you buy a 1-year, 210,000-peso Philippine bond that pays 7 percent when the exchange…
A: Given, Investment amount = 210,000 peso Exchange rate = 1 Canadian dollar for 40 peso Interest rate…
Q: You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them…
A: Cross price elasticity of demand measures the responsiveness of quantity demanded of good 1 with…
Q: Should policymakers use monetary policy, fiscal policy, or both in an effort to stabilize the…
A: PLEASE FIND THE ANSWER BELOW. AGGREGATE DEMAND CURVE: In macroeconomics, the focus is on the…
Q: What is the behaviour of average fixed cost as output increases?
A: The total cost of production is the sum of all expenses involved in the creation of goods and…
Q: Scenario1: a. If your company can make two goods, use a numerical table and list different…
A: (a). Let the business produce good X and good Y. The following is a list of production…
Q: D7) Discuss some features of labor markets that requires substantial extensions to the standard…
A: The labor market, also known as the job market, is concerned with the supply and demand for labor,…
Q: A well educated society can be considered which of the following, as it pertains to economics?…
A: If a person's knowledge and abilities are developed in such a way that they finally result in a…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Suppose two gas stations operate at the same busy intersection. Assuming that these firms are engaged in tacit price collusion, can we automatically conclude that there is no competition for customers between the two stations?Two firms - firm 1 and firm 2 - share a market for a specific product. Both have zero marginal cost. They compete in the manner of Bertrand and the market demand for the product is given by: q = 20 − min{p1, p2}. 1. What are the equilibrium prices and profits? 2. Suppose the two firms have signed a collusion contract, that is, they agree to set the same price and share the market equally. What is the price they would set and what would be their profits? For the following parts, suppose the Bertrand game is played for infinitely many times with discount factor for both firms δ ∈ [0, 1). 3. Let both players adopt the following strategy: start with collusion; maintain the collusive price as long as no one has ever deviated before; otherwise set the Bertrand price. What is the minimum value of δ for which this is a SPNE. 4. Suppose the policy maker has imposed a price floor p = 4, that is, neither firm is allowed to set a price below $4. How does your answer to part 3 change? Is it now…American Airlines and Braniff Airways are the two airlines operating flights from your region. Suppose that each company can charge either a high price for tickets or a low price. First, American Airlines will choose the price level. Following this, Braniff Airways will observe its competitor’s decision and choose the price level for its tickets. If both of the companies choose High, they earn $25,000 each. If they both choose Low, they earn $18,000 each. If the companies choose different levels of prices, the one choosing the high price will earn $15,000 and the one choosing Low will earn $30,000. a) Draw the game three. b) Solve the game by using backwards induction. c) If Braniff Airlines makes a promise to choose High if American Airlines chooses High, should American Airlines trust this promise? Explain.
- Suppose that two clothing manufacturers, Lands’ End and L.L. Bean, are deciding what price to charge for very similar field coats. The cost of producing these coats is $100. The coats are very close substitutes, so customers flock to the seller that offers the lowest price. If both firms offer identical prices, each receives half the customers. For simplicity, assume that the two firms have the choice of pricing at prices of $103, $102, or $101. The profit each firm would earn at various prices (Lands’ Ends Profit, LL Bean’s Profit) is attached in the payoff matrix below: a.) What is the Nash equilibrium and expected profits to LL Bean and Lands’ End of this game? b.) Suppose this is a mixed strategy game in which LL Bean has a 25% percent chance of choosing a priceof $101, a 25% chance of choosing price of $102, and a 50% chance of choosing $103, while Lands End has a1/3 chance of choosing each strategy. What’s the expected payoff to LL Bean? c.) Suppose that in hopes of raising…Two firms compete by choosing price. Their demand functions are: Q1 = 20 -P1 +P2 and Q2 = 20 - P1 + P2 where P1 and P2 are the prices charged by each firm, respectively, and Q1 and Q2 are the resulting demands. Note that the demand for each good depends only on the difference in prices; if the two firms colluded and set the same price, they could make that price as high as they wanted and earn infinite profits. Marginal costs are zero.a. Suppose the two firms set their prices at the same time. Find the resulting Nash equilibrium. What price will each firm charge, how much will it sell, and what will its profit be? (Hint: Maximize the profit of each firm with respect to its price.) {15 Marks}b. Suppose Firm 1 sets its price first and then Firm 2 sets its price. What price will each firm charge, how much will it sell, and what will its profit be? {10 Marks}c. Suppose you are one of these firms and that there are three ways you could play the game: (i) Both firms set price at the same…Consider a Bertrand duopoly. Both firms produce an identical good at the same constant marginal cost of $0.80. Demand is given by Q=100−P. If the two firms charge the same price, they share market demand equally. The firms are located in Singapore, where the smallest currency denomination is $0.05. The firms thus can only choose prices in increments of $0.05. a) Suppose that both firms choose the same price, P. What is the profit of a firm as a function of P? b) Now suppose that one firm unilaterally deviates from the arrangement in (a) by charging a price $0.05 lower than P. What is that firm’s profit as a function of P? c) A Nash equilibrium occurs when no firm has an incentive to deviate by lowering its price. Using your answers in (a) and (b), set up an inequality that characterizes the Nash equilibrium. Then solve for the Nash equilibria in this game. (Hint: there are three equilibria)
- A community's demand for monthly subscription to a streaming music service is shown by the following table. Assume that there are only two firms serving this market (Firm A and Firm B), each firm offers the same quality of service and music selection, and that each firm’s marginal cost is constant and equal to 0 (zero). (please refer to table provided) If this market were highly competitive instead of a duopoly, the quantity of streaming movie subscriptions purchased each month would be ______ If the two firms agreed to each supply one half of the quantity a monopoly would supply, the contract would specify that each firm would supply ____Consider a Duopoly model, in which two firms decide a quantity sequentially. For the convenience, let's say Firm 1 is a dominant firm and Firm 2 is a follower. The market demand is given by P=110 - 5Q, where Q is the total output (i.e., Q=Q1+Q2). Each firm has an identical cost function, TCi=7Qi, i=1, 2. Each firm maximizes its profit by choosing the quantity. In this Stackelberg equilibrium, Firm 1 will sell __________ units.Consider a Duopoly model, in which two firms decide a quantity sequentially. For the convenience, let's say Firm 1 is a dominant firm and Firm 2 is a follower. The market demand is given by P=110 - 5Q, where Q is the total output (i.e., Q=Q1+Q2). Each firm has an identical cost function, TCi=7Qi, i=1, 2. Each firm maximizes its profit by choosing the quantity. In this Stackelberg equilibrium, Firm 1 will sell how many units.
- Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function: P=600−QC−QD�=600−��−�� where QC�� and QD�� are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TCC=25,000+100QCTC�=25,000+100�� TCD=20,000+125QDTC�=20,000+125�� Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm’s output will not change). For Company C, the long-run equilibrium output is , and the selling price is . For Company D, the long-run equilibrium output is , and the selling price is . At the equilibrium output, Company C earns total profits of , and Company D earns total profits ofHow would the Cournot equilibrium change in the airline example if American's marginal cost were $90 and United's were $180? The demand the duopoly quantity-setting firms face is Q=339−p with an inverse demand function of p=339−1qA −1qU where qA is the quantity produced by American and qU is the quantity produced by United. The Cournot-Nash equilibrium occurs where qA equals ? enter your response here and qU equals? enter your response here. (enter numeric responses using integers) Furthermore, the equilibrium occurs at a price of ? (round your answer to the nearest penny)Two firms are producing identical goods in a market characterizedby the inverse demand curve P = 60 - 2Q, where Q is the sum of Firm 1's and Firm 2's output, q1 + q2. Each firm's marginal cost is constant at $12, and fixed costs are zero. Answer the following questions, assuming that the firms are Cournot competitors. In this case, the market price is $