Q: 23. HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will…
A: Private returns are the rate of return earned by private persons. For instance, interest from a…
Q: In an open economy,a change in domestic net foreign asset depends on how much is saved, and on…
A: In an open economy, the domestic net foreign asset (DNFA) is decided by the difference among a…
Q: The management of an ‘Electronic Goods’ manufacturing company asked you to give an advice about…
A: - Annual production plan of computers is 4200 computers.- Total cost of production is OMR…
Q: 1. Should the U.S. government regulate more, less, or take no antitrust action against the Big Tech…
A: Government regulation refers to the rules, standards, and policies that are imposed by the…
Q: For question a) my professor says it's TRUE but I don't have an explanation, must a graphic is…
A: Dear student, you have asked multiple questions in a single post. In such a case, as per Bartleby's…
Q: if marginal revenue equals $2 and marginal cost equals $3 at a certain output then.... a. the output…
A: Total revenue is the total value of the commodities produced and sold in equilibrium. Economic costs…
Q: a) What is the level of production maximizes the short-term profits of this company? b) What price…
A: The monopolistic firms are not efficient because these firm charges higher prices and has high…
Q: To examine the relationship between unemployment and inflation by using Phillip curve ….there is…
A: The Phillips Curve is a pictorial representation of an economy's relationship between unemployment…
Q: If the price in a competitive market is "lower than equilibrium" then a. quantity demanded exceeds…
A: Competitive market refers to a market in which there are a huge number if buyers and sellers which…
Q: Should the Fed be independent or a government agency subordinate to Congress and the president?
A: The Federal Reserve in the U.S was created on 23rd December 1913. It is the central bank of the…
Q: 1. Monopoly Pricing. A Graphical Analysis. The two panel graph below illustrates the market for…
A: Perfect competition is the market in which the firms take the price as given. They cannot decide the…
Q: Question 12 Cecilia usually bought several pairs of designer shoes each year, but she lost her job…
A: Demand Schedule: Demand schedule for a good is a combination of different price and optimal quantity…
Q: 8. The reserve requirement, open market operations, and the moneysupply Consider system of banking…
A: Required reserve ratio is the proportion of deposits banks must hold as reserves.
Q: A _______ occurs when decision-makers face incentives that make it difficult to achieve mutually…
A: In economics, decision-making involves evaluating the costs and benefits of various alternatives and…
Q: 2. Monopoly Pricing. An Analytical Example. Consider a firm with the demand curve P = 500-Q and a…
A: Marginal revenue is the additional revenue created by selling one additional unit of a product or…
Q: Find the optimum strategies for player A, the row player, and player B, the column player, in the…
A: A saddle point in game theory refers to a unique solution of a game where the payoff of one player…
Q: Briefly discuss the importance of the Depository Institutions Deregulation and Monetary Control Act…
A: Monetary control alludes to the moves made by a central bank or monetary power to manage the supply…
Q: Firm X will (enter buy or sell) sell $ ton If the government decides to initially auction the…
A: The Fist part of this question, i.e. "Firm X will sell 52 permits" is not correct. The detailed…
Q: For each of the following, identify whether the aggregate demand (AD) or short run aggregate supply…
A: Aggregate demand is the sum of Consumption, Investment, government spending and net export.…
Q: Suppose the U.S. government has just hired you to analyze the following scenario. Assume the U.S.…
A: A country's ability to import a certain amount of a good over a specific period of time is…
Q: How long will you have to maintain a business that has an income of $10,000 per year and an expense…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: effect of fiscal and monetary policy on aggregate demand in Zimbabwe
A: Aggregate demand in country Z, or any country as a matter of fact, can be described as the entire…
Q: Which of the following is not an argument for trade restrictions? a. Consumer choice argument b.…
A: Trade restrictions are limitations set on the flow of goods and services from one country to the…
Q: b. Calculate GDP of Economica according to the expenditure approach c. Calculate GDP of Economica…
A: A measure of a country's economic performance is its GDP. It displays the total cost of all finished…
Q: In Game Theory, there is an incentive to cheat. Please explain both the prisoner’s dilemma and the…
A: Game theory is a mathematical and scientific structure used to study and examine strategic decision…
Q: Suppose a banking system has $ 130,000 of checkable deposits and actual reserves of $ 20,000. If the…
A: The reserve ratio is the portion of reservable liabilities that commercial banks must hold onto,…
Q: P₁ bd/ B LRAS A -SRAS₁ SRAS₂ SRAS3 AD Y Y In the graph above, assume that the economy is currently…
A: The AD curve shows the total demand for all goods and services in an economy at different price…
Q: Unfortunately, the answer is option B. Why is your response different with answer?
A: Market failure is when the free market equilibrium quantity of output is not the same as the…
Q: Assume an aggregate production function with a constant marginal product of capital and with capital…
A: The growth rate of output alludes to the rate change in the degree of output over a predetermined…
Q: Guardian is a national manufacturing company of home health care appliances. It is faced with a…
A: Given data: To make: 2 machines are required: machine A: Initial cost=$18000 Salvage value=$2000…
Q: Suppose that the equilibrium price of good x (keeping the price of good y as 1) is equal to 1.…
A: A nation can participate in the international division of labor when it opens up to trade, where…
Q: Pfd Company has debt with a yield to maturity of 6.2%, a cost of equity of 14.4%, and a cost of…
A: Formula for WACC (weighted average cost of capital) is given as: = (weightage of equity*cost of…
Q: C. What are the implications for the full-employment level of employment N and the level of…
A: The Keynesian Efficiency Wage Model is an economic theory that proposes that organizations pay…
Q: calculate Zara's 2021 revenue in 2007 real dollars.
A: Average CPI in 2007 = 207.34 Average CPI in 2021 = 270.97 Revenue in 2021 = $12.93 billion…
Q: The price of shampoo increased. Choose the correct colored graph for conditioner, a related product…
A: Related goods are products that are either substitutes or complements to each other in the eyes of…
Q: Discuss thoroughly 1 macroecomic issue in the Philippines and explain throughly why it is relevant…
A: A macroeconomic issue is a major problem or challenge faced by an economy as a whole, rather than by…
Q: Consider a market with two identical firms: Firm A and Firm B. • The market demand is P = 340 – 2Q,…
A: A market where firms decide how much commodities need to be sold and where the prices are determined…
Q: A program to improve a ferry system by adding new technology has much promise. The new system will…
A: Net present value (NPV) will be calculated as difference among the present value (PV) of inflows of…
Q: The Ajax Corporation has an overhead crane that has an estimated remaining life of 10 years. The…
A: The machinery should be replaced or it should not be replaced it can be determined by calculating…
Q: compare theory with practice about GDP can be reliable indicator of standard of living
A: National income can be described as the aggregate value of services and goods produced from within a…
Q: 1. Canada is an open economy that is currently in a recessionary output gap. (a) Draw a correctly…
A: The point where the long-run aggregate supply curve, short-run aggregate supply curve, and aggregate…
Q: A project has a first cost of $200,000 with annual costs of $50,000 and revenue of $90,000 per year.…
A: The amount of time that is taken up by any organisation to recover the cost of investment. Once the…
Q: What is the firm's fixed cost? What is the profit-maximizing level of output? Given that half of…
A: Profit maximizing level of output is given at the point where marginal revenue (MR) equals marginal…
Q: You purchase a home for $436,000 by making a down payment of 15% and financing the remaining amount…
A: Given the below: Purchase price = $436,000 Interest rate = 2.12% compounded monthly or 2.12%/12 =…
Q: On a diagram, demonstrate the effects of (a) a fall in investment and (b) a fall in the money…
A: Public expenditure refers to that component of aggregate demand which is influenced by the…
Q: Price ($/lb) Quantity Supplied (thousands of lbs per day) Quantity Demanded (thousands of lbs per…
A: Subsidy: The subsidy is the amount paid by the government to the producer for selling certain…
Q: What is the marginal cost of producing another unit of output:
A: Marginal cost is the additional cost that a firm incurs by producing one more unit of output. It is…
Q: Suppose the economy's entire money supply equals checkable deposits in the amount of $1,600,000 held…
A: The banking industry plays a crucial role to the modern economy. Banks receive consumer money and…
Q: 4. Calculating tax incidence Suppose that the local government of Corpus Christi decides to…
A: Given: # Before Tax Q = 20,000 P = $10 # After Tax Q = 13,000 Consumer Pays = $12 / unit…
Q: If you invest P500 at an annual interest rate of 10% compounded continuously, calculate the final…
A: Compounding alludes to the method involved with earning interest on the initial investment as well…
Let the market demand for carbonated water be given by Q = 100 - 5P. Let there be two
firms producing carbonated water, each with a constant marginal cost of 2. If both firms
choose their prices simultaneously, what price would each of them charge in the Nash
equilibrium?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Two firms, 1 and 2, compete in price Market demand in period t is given by D(t) = AtD(p) with A > 0 The common discount factor is ? ? (0, 1) Suppose the firms use trigger strategies to collude at the monopoly price pm = arg max(p ? c)(A)tD(p) ? (A)t?m (note that pm does not depend on A and t due to the function form) Suppose the punishment after deviation is returning to marginal cost pricing forever If the firms collude, they set the same prices and evenly split the profits What are firms’ collusive profits in period t? If a firm undercuts below pm in period t, what are the (optimal) deviating price and deviating profit Write down the no-deviating condition in period t? Simplify the no-deviating condition and derive the critical discount factor ? Compared to when the market is shrinking (A 1) make collusion easier? Explain in words your finding in [e]Suppose the market demand for ECO textbooks at the University is given by ?=1000−2?Q=1000−2P. The Marginal Cost of a textbook is $50. Suppose there are only two textbook publishers, both printing the exact same textbook. They compete in a Cournot manner. Suppose each firm produces ?=450q=450. Is this an equilibrium? Explain your reasoning, show all the steps of your working clearly. Keep your responses short and precise. Under 250 words is a good rule of thumb.Consider two firms that produce the same good and competesetting quantities. The firms face a linear demand curve given by P(Q) =1 − Q, where the Q is the total quantity offered by the firms. The costfunction for each of the firms is c(qi) = cqi, where 0 < c < 1 and qiis the quantity offered by the firm i = 1, 2. Find the Nash equilibriumoutput choices of the firms, as well as the total output and the price, andcalculate the output and the welfare loss compared to the competitiveoutcome. How would the answer change if the firms compete settingprices? What can we conclude about the relationship between competitionand the number of firms?
- Bertrand duopolists face MWTP = 6 - Q and can produce any quantity without marginal and fixed cost. If the two firms compete for only 1 period, what is a Nash equilibrium price? (Assume prices must be in whole cents. Remember, do not enter the $ sign.)Consider a Cournot Duopoly model. The inverse demand for their products is given byP = 200 − 6Q, where Q is the total quantity supplied in the market (that is, Q = Q1 + Q2). Each firm has an identical cost function, given byT Ci = 2Qi, for i = 1, 2.(a) In the Cournot model, what does each firm choose?(b) What is the timing of each firm’s decision?(c) Find the Nash equilibrium quantities (Q∗1, Q∗2)?(d) What is the equilibrium price? Just help with c and d here pleaseConsider Hotelling's model (a street of length one, consumers uniformly distributed along the street, each consumer has a transportation cost equal to 2t, where t is the distance traveled). Suppose there are two gas stations, one located at 1/4 and the other located at 1. (a) Calculate the demand functions for the two firms. (b) If the two gas stations compete in prices and settle at a Nash equilibrium, will they charge the same price for gasoline? (assume that production costs are zero, that is, firms maximize revenue).
- Two dairy farmers produce milk for a local town with local milk demand given by Q=100-1/3P(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) Determine the reaction function of each farmer. (b) Find the Cournot-Nash equilibrium. (c) Calculate profits for each farmer (d) Suppose that both farmers decide to form a cartel, determine profitsfor each farmer under the cartel (e) What output should farmer 1 produce if he/she expects their rival to produce 20 units? (f) Calculate the profits if farmer 2 decides to break the cartel agreement (g) Does joining a cartel offer any benefits to both farmers? Justify your answer (h) What if farmer 1 is a leader and farmer 2 a follower, determine the price, quantity and profits made by these two farmers. Please solve d, e,f,g and hTwo dairy farmers produce milk for a local town with local milk demand given by Q=100-1/3P(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) Determine the reaction function of each farmer. (b) Find the Cournot-Nash equilibrium. (c) Calculate profits for each farmer (d) Suppose that both farmers decide to form a cartel, determine profitsfor each farmer under the cartel (e) What output should farmer 1 produce if he/she expects their rival to produce 20 units? (f) Calculate the profits if farmer 2 decides to break the cartel agreement (g) Does joining a cartel offer any benefits to both farmers? Justify your answer (h) What if farmer 1 is a leader and farmer 2 a follower, determine the price, quantity and profits made by these two farmers. Please answer g and hJoe and Rebecca are small-town ready-mix concrete duopolists. The market demand function is Qd = 10,000 – 100P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $25 per cubic yard. Suppose that Joe and Rebecca compete in quantities and competition in this market is described by Cournot model. What are Joe and Rebecca’s Nash equilibrium outputs? What is the resulting price? What do they each earn as profit? How does the price compare to the marginal cost? Joe and Rebecca are small-town ready-mix concrete duopolists. The market demand function is Qd = 10,000 – 100P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $25 per cubic yard. Suppose that Joe and Rebecca compete in quantities and competition in this market is described by Cournot model. What are Joe and Rebecca’s Nash equilibrium outputs? What is the resulting price? What do they each…
- Consider a Duopoly model, in which two firms decide a quantity simultaneously. The market demand is given by P=120 - 3Q, where Q is the total output (i.e., Q=Q1+Q2). Each firm has an identical cost function, TCi=12Qi, i=1, 2. If Firm 1 believes Q2=12, Firm 1 should sell Q1= _____ units in order to maximize its profit.Two dairy farmers produce milk for a local town with local milk demand given by Q=100-1/3P(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(where q denotes output).(a) Determine the reaction function of each farmer.(b) Find the Cournot-Nash equilibrium.(c) Calculate profits for each farmer(d) Suppose that both farmers decide to form a cartel, determine profitsfor each farmer under the cartel (e) What output should farmer 1 produce if he/she expects their rival to produce 20 units? (f) Calculate the profits if farmer 2 decides to break the cartel agreement (g) Does joining a cartel offer any benefits to both farmers? Justify your answer (h) What if farmer 1 is a leader and farmer 2 a follower, determine the price, quantity andprofits made by these two farmers note please answer d,e,fConsider a "Betrand price competition model" between two profit maximizing widget producers say A and B. The marginal cost of producing a widget is 4 for each producer. Each widget producer has a capacity constraint to produce only 5 widgets. There are 8 identical individuals who demand 1 widget only, and individuals value each widget at 6. If the firms are maximizing profits, then which of the following statement is true: a) Firm A and Firm B will charge 4 b) Firm A and Firm B will charge 6 c) Firm A and Firm B will charge greater than or equal to 5 d) None of the options are correct. Explain clearly.