Which of the following is true about the optimal output of the firm? A. P = MR = MC under pure competition B. P > MR = MC under pure monopoly C. P > MR = MC under monopolistic competition D. P > MR = MC under oligopoly E. all are true
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- In the mobile phone market, Samsung and Apple constitute a duopoly in the production of devices.The American firm has the following demand q_a = 10 - p_a + 0.25p_s, and the Korean firm, q_s = 20 -p_s+ 0.5p_a. Because both firms assembly their devices in China, their cost structure is the same andequal to ?(q) = 10q, answer the following questions.a) What would be the equilibrium (quantity, price, and profit) in this market, and interpret youranswer.b) If they decide to form a cartel, what are the new quantities, prices, and profits?Suppose button industry is characterized by monopolistic competition with external economy. China is currently the dominant producer of buttons. Explain why Vietnam may find it difficult to compete with China in a button industry even if Vietnam has lower average cost as a function of the size of the industryWHAT IS THE DIFFERENCE BETWEEN MONOPOLY AND OLIGOPOLY? PROVIDE EXAMPLES. WHAT IS A MONOPOLISTIC COMPETITION? PROVIDE EXAMPLE. WHAT IS A PERFECT COMPETITION? PROVIDE EXAMPLE SITUATIONS
- Assume a duopoly (two firms: A and B) is facing a common demand equation but different cost equations. Q = 300-20P TCA = 300+20Q+2Q2 TCB = 250+10Q+3Q2 Show the profit maximizing quantity (Q) to each firm (A and B) and the corresponding prices (PA and PB). How would the two firms ultimately resolve price competition?A group of firms that gets together to make price and output decisions is called. Single choice. a.a non-collusive oligopoly. b.price leadership. c.a cartel. d.a concentrated industry Which of the following industries is the best example of monopolistic competition?. Single choice. a.Wheat b.Restaurant d.Automobile c.Water service Which of the following is a characteristic of pure monopoly?. Single choice. a.one seller of the product b.low barriers to entry c.close substitute products d.perfect information Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm has an accounting profit of:. a.$500,000 and an economic profit of $200,000. b.$400,000 and an economic profit of $200,000. c.$300,000 and an economic profit of $400,000. d.$200,000 and an economic profit of $500,000.…Question 2Bob and Alice are duopoly competitors for ice cream in Venice Beach,CA. Market demand for ice cream is p = 1000 − 2Q and both Alice’sand Bob’s costs of production are identical and given by C(q) = 4q.Calculate market price and quantity ifa) Alice and Bob are in Cournot competition.b) Alice and Bob are in Bertrand competition.c) Alice and Bob decide to coordinate their decisions in a cartel (i.e.to build a monopoly) and to equally share profits.
- For each of the following characteristics, say whether it describes a monopolistic competitive or oligopoly market, both or neither. There is a single model to explain the firm's behavior. Firms in this market produce the socially efficient level of output. Firms make zero economic profit in the long run. Market is dementated by a few firms. Strategic behavior is very important.For each of the following characteristics, say whether it describes a monopolistic competitive or oligopoly market, both or neither. There is a single model to explain the firm's behavior. Firms in this market produce the socially efficient level of output. Firms make zero economic profit in the long run. Market is dominated by a few firms. Strategic behavior is very important. EditViewInsertFormatToolsTable 12pt ParagraphSuppose that a typical firm in a monopolistically competitive industry faces a demand curve given by: q = 60 − (1/2)p, where q is quantity sold per week. The firm’s marginal cost curve is given by: MC = 60. 1. How much will the firm produce in the short run? 2. What price will it charge? 3. Draw the firm’s demand, marginal revenue, and marginal cost curves. Does this solution represent a long-run equilibrium? Why or why not? Sometimes oligopolies in the same industry are very different in size. Suppose we have a duopoly where one firm (Firm A) is large and the other firm (Firm B) is small, as shown in the prisoner’s dilemma box in Table 5.Firm B colludes with Firm AFirm B cheats by selling more outputFirm A colludes with Firm BA gets $1,000, B gets $100A gets $800, B gets $200Firm A cheats by selling more outputA gets $1,050, B gets $50A gets $500, B gets $20Assuming that the payoffs are known to both firms, what is the likely outcome in this case?
- In the model of monopolistic competition, if firms have ________ average cost curves, then opening trade will cause ________ firms to ________ the industry. A. symmetric; less efficient; exit B. symmetric; more efficient; enter C. different; less efficient; exit D. different; more efficient; enterSuppose there are two distinct industries - (1) the fast-food industry and (2) the sporting goods industry. Classify each industry into one of the following market structures. (Minimum word requirement: 100 words) Perfect competition Monopoly Monopolistic competition OligopolyDiscuss to what extent you agree with the following statements. Monopolistically competitive firms are producing efficiently because P=MC in the long-run.
