Ugly Dolls Inc. (UD) is a firm in Mytown that sells its products on a market under monopolistic competition. The cost function of UD is represented by TC = 100+10Q. Lately, because of the UD is making a big amount of profit, some firms enter the market to compete. If the number of firms entering the dolls market increase, we know that, (a) The price of dolls will drop. (b) The average cost of UD will increase. (c) The quantity sold by UD will drop. (d) All the above answers are correct.
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Ugly Dolls Inc. (UD) is a firm in Mytown that sells its products on a market under
monopolistic competition . The cost function of UD is represented by TC = 100+10Q. Lately, because of the UD is making a big amount of profit, some firms enter the market to compete. If the number of firms entering the dolls market increase, we know that,-
(a) The price of dolls will drop.
-
(b) The average cost of UD will increase.
-
(c) The quantity sold by UD will drop.
-
(d) All the above answers are correct.
-
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- In the packaged energy drink industry, there are only two companies that have the same relative strength in the market, namely “Pocary” and “Ion-1000”. It is known that the demand function in the market for this industry is as follows: Q = 1000 - 0.1P. Where Q in the market is supplied by these 2 companies. It is known that the total cost of the company is TC = 2q2 while for Ion-1000 is TC = 2.5q2 a. If these 2 companies collude, what is the price and quantity offered in the market at equilibrium, and calculate the profit of each company? b. If these 2 companies compete, look for the best respond function of each company, and what is the price and quantity offered in the market at equilibrium, and calculate the profit of each company? c. Make it in the game theory form of the two strategies "Collusion" and "Compete" and look for "Nash Equilibrium" in just one game? (Note, if one is a collusion strategy, then the quantity produced collusion strategy is the same as the calculation result…As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is P = 20 − 0.001Q; on weekdays, it is P = 15 − 0.002Q. You acquire legal rights from movie producers to show their films at a cost of $25,000 per movie, plus a $2.50 “royalty” for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once). Devise a pricing strategy to maximize your firm’s profits.As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is P = 20 – 0.001Q; on weekdays, it is P = 15 – 0.002Q. You acquire legal rights from movie producers to show their films at a cost of $25,000 per movie, plus a $2.50 “royalty” for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once).
- As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is P = 20 - 0.001Q; on weekdays, it is P = 15 - 0.002Q. You acquire legal rights from movie producers to show their films at a cost of $25,000 per movie, plus a $2.50 "royalty" for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once). What price should you charge on weekends? What price should you charge on weekdays?Two firms produce a homogeneous good and compete in price. Prices can only take integer values. The demand curve is Q = 6 p, where p denotes the lower of the two prices. The lower - priced firm meets all the market demand. If the two firms post the same price p, each one gets half the market demand at that price, i. e., each gets (6p)/2. Production cost is zero.a) Show that the best response to your rival posting a price of 6 is to post the monopoly price of 3. What is the best response against a rival's price of 4? of 5?Two identical firms compete as a Coumot dopoly. The inverse market demand they face is P-128 - 4Q. The total cost function for each firm is TCQ) - 8Q. The price charged in this market will be
- Suppose that two Japanese companies, Hitachi and Toshiba, are the sole producers (i.e., duopolists) of a microprocessor chip used in a number of different brands of personal computers. Assume that total demand for the chips is fixed and that each firm charges the same price for the chips. Each firm’s market share and profits are a function of the magnitude of the promotional campaign used to promote its version of the chip. Also assume that only two strategies are available to each firm: a limited promotional campaign (budget) and an extensive promotional campaign (budget). If the two firms engage in a limited promotional campaign, each firm will earn a quarterly profit of $14 million. If the two firms undertake an extensive promotional campaign, each firm will earn a quarterly profit of $11 million. With this strategy combination, market share and total sales will be the same as for a limited promotional campaign, but promotional costs will be higher and hence profits will be lower.…Perrier and Apollinaris. Perrier and Apollinaris are two companies that sell mineral water in Tampa, FL. Each company has a fixed cost of $5,000 per period, regardless whether they sell anything or not. The two companies are competing for the same market and each firm must choose a high price ($2 per bottle) or a low price ($1 per bottle). Here are the rules of the game: At a price of $2, 5,000 bottles can be sold for total revenue of $10,000. At a price of $1, 10,000 bottles can be sold for total revenue of $10,000. If both companies charge the same price, they split the sales evenly between them. If one company charges a higher price, the company with the lower price sells the whole amount and the company with the higher price sells nothing. Payoffs are total profits. In this case, Apollinaris has: no dominant strategy. Perrier has a dominant strategy of P=$1. a dominant strategy of P=$1. Perrier also has a dominant strategy of P=$2. a dominant strategy…Perrier and Apollinaris. Perrier and Apollinaris are two companies that sell mineral water in Tampa, FL. Each company has a fixed cost of $5,000 per period, regardless whether they sell anything or not. The two companies are competing for the same market and each firm must choose a high price ($2 per bottle) or a low price ($1 per bottle). Here are the rules of the game: At a price of $2, 5,000 bottles can be sold for total revenue of $10,000. At a price of $1, 10,000 bottles can be sold for total revenue of $10,000. If both companies charge the same price, they split the sales evenly between them. If one company charges a higher price, the company with the lower price sells the whole amount and the company with the higher price sells nothing. Payoffs are total profits. In this case, the NE is(are): (P=$2, P=$1). (P=$1, P=$2). (P=$2, P=$2). (P=$1, P=$1).
- Which of the following statements is correct? Group of answer choices The more similar Firm A’s product is to Firm B’s product, the more likely Firm A is to advertise. Monopolistically competitive firms advertise in order to increase the elasticity of the demand curve they face. According to the signaling theory, the more product information an advertisement contains, the more effective it is. Brand names may help consumers if they provide information about the quality of a product when acquiring such information is difficult.The demand and total cost functions for a monopolistically competitive market are: Q(P) = 300/N – P, where N = number of firms TC(Q) = 50 + Q2 There are currently three firms in this market and they are in a short run equilibrium. c) In the long run, how many firms are in the market (round to the nearest integer)?If you advertise and your rival advertises, you each will earn $5 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $15 million and the non-advertising firm will earn $1 million. Which of the following is true? Multiple Choice A secure strategy for firm A is to not advertise. Firm A does not have a secure strategy. A secure strategy for firm B is to not advertise. None of the answers is correct.