Take a market with just one business and high obstacles to entry, where P = 100 - 2Q and MR = 100 - 4Q describe the demand curve. Assume that overall expenses are zero (hence, marginal cost is equal to 0). What would the going rate be in this marketplace? P = 20 P = 30 P = 50 P =
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Take a market with just one business and high obstacles to entry, where P = 100 - 2Q and MR = 100 - 4Q describe the
P = 20
P = 30
P = 50
P = 40
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- Consider a market with just one business and high obstacles to entry, where P = 100 - 2Q and MR = 100 - 4Q describe the demand curve. Assume that overall expenses are zero (hence, marginal cost is equal to 0). What would the going rate be in this marketplace?P = 20P = 30P = 50P = 40Refer to Scenario below to answer the following questions. The government of Stratospheria is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P=55-0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR=55-0.02Q. Fun Cable Company is interested in bidding for the right to provide cable service in Stratospheria. It has a constant average and marginal cost of RM5 for providing cable service to each household. Question:1)What is the most Fun Cable Company would bid for the franchise?(please show the steps of calculation)A travel agency identifies two customer segments for a cruise ship. The demand curve for customers that are less price-sensitive is D1=1000-2P1. The demand curve for customers that are more price-sensitive is D2=1000-3P2. The cost of maintaining each cabin is $50. If one single price is charged, what is the price to maximize the profit? What is the profit? If the differential prices are charged to each customer segment, what is the price for each customer segment respectively? What is the total profit? What is the profit increase by charging different prices to each customer segment compared with one single price?
- In terms of reputation for quality, imagine that we have a firm that can produce a good at any quality level in the interval [0, 1], where 0 means a good of low quality, and 1 means a good of exceptionally high quality. Demand for the good depends on consumer perceptions of the good's quality. If consumers anticipate that the good is of quality q, their demand is given by · P. = 4 + 6q - X, where X is the quantity demanded. Costs of manufacture depend on the quality level of the good being produced; it costs a constant marginal 2 + 6q2 to produce a unit of quality level q. Consider the repeated setting described in section 14.5: In each period, the firm chooses a quality level and price. Consumers see the price but not (until after they have bought) the quality level. But consumers do know the level of qualities the firm has produced previously. Assume the firm discounts profits with a discount factor a = .9. For which levels of quality q is there a viable reputational…Economics An incumbent firm, Firm 1, faces a potential entrant, Firm 2, with a lower marginal cost LOADING... . The market demand curve LOADING... is p=220−q1−q2. Firm 1 has a constant marginal cost of $40 per unit, while Firm 2's is $10. Part 2 To block entry, the incumbent appeals to the government to require that the entrant incur extra costs. Part 3 Suppose that the legal intervention imposed by the government leaves the marginal cost alone (at $10 for Firm 2) but imposes a fixed cost. What is the minimal fixed cost that will prevent entry? Part 4 The minimum fixed cost (F) that will deter entry is F=$enter your response here.A company can successfully charge different prices in country A and B. Marginal cost is $10. Demands in country A and B are Q=20.5-P and Q=5-P respectively. What are the profit- maximising prices in two countries? What quantity do they sell in two countries? The company now added country C, and its demand is Q=20.5-P. What maximising prices do they charge in three countries? What quantity do they charge in three countries?
- You are a self-employed accountant who owns Budget Tax Prep, which specializes in tax preparation services. There are many competitors in your industry who offer a similar service, but quality of service varies among competitors. Entry into this industry is relatively easy. Your company's daily demand curve and cost functions, including your own opportunity costs, are currently (with Q being number of tax returns processed per day): Demand: P(Q) = 100 - 4Q Total Fixed Costs: TFC = 60 Total Variable Costs: TVC(Q) = (8.5)Q2 Marginal Costs: MC(Q) = 17Q A. Find your company's profit maximizing output and price using any method you wish. B. Calculate the level of total profit or loss per period that would accrue to the firm under the output and price determined in (a). C. What might happen to your profits over time, given the characteristics of your market described above.The intention of deregulating markets such as air passenger transport in the late 1980s and early 1990s was to a. improve returns to shareholders. b. provide greater consumer choice and lower prices c. increase labour market flexibility. d. increase tax revenue. A key factor in the incomes of the Roman Empire being slightly higher compared to after the fall of the Roman Empire was because a. double entry book keeping meant firms could trade with certainty. b. the known world was relatively open to trade. c. government spending was low. d. there were well developed credit markets.A strong form of market efficiency is one where the price of a particular share reflects all, both private and public, information about the company. * True or False?
- Consider PNW Airlines, an airline focused on transporting cargo. Their fleet is composed of four cargo airplanes. Total cargo capacity of the fleet is 100,000 cubic feet. The monthly cost of maintaining and operating the fleet is $50,000. Market research indicated that the demand curve for cargo capacity is d=300,000-25,000p where d is the demand across all segments and p is the transport price per cubic foot. What is the price that maximizes profit for PNW Airlines if all the demand comes from a single segment?Suppose a monopoly firm has an annual demand function of Qd = 20,000 - 250P, annual variable costs of VC = 16Q + 0.002Q2 and marginal cost of MC = 16 + 0.004Q, where Q is the annual quantity of output. In addition, the firm has an avoidable fixed cost of $25,000 per year. If this firm maximizes its profit, what is the value of the consumer surplus in the market?Suppose that there are two fancy hotels on the online booking platform, say W hotel and Ritz Carlton hotel. Each hotel has the capacity of 20 rooms on the New Year Eve. There are 20 families who are planning to stay at Bay Areas. Suppose that you are the manager and you set the price to maximize the hotel profit. The marginal cost of each hotel room = 500 RMB The largest valuation on the hotel room = 2000 RMB valuation decrease by 100RMS. In total, there are 20 families. Discuss with your peers how many rooms you will offer in the market.