You are the manager of Taurus Technologies, and your sole competitor is Spider Technologies. The two firms' products are viewed as identical by most consumers
Q: 1. Find the value of autonomous spending. 2. What is the slope of the LM curve? 3. Find the value of…
A: The IS curve is defined by the equation mentioned below: Y= C + I + G Where Y is the real GDP C is…
Q: The biological relationship between the growth for the fish population and the size of the fish…
A: The expression "sustainability" alludes to the most common way of reaching current goals without…
Q: If Canada's economy moves into an expansionary phase of the business cycle, then: Group of answer…
A: In expansionary phase the Aggregate demand is at boom and the unemployment is at lowest point.…
Q: Consider a 2-good, 2-agent pure exchange economy with complete markets (no externalities) and let…
A: A Walrasian equilibrium consists of a vector of prices and a consumption bundle for each agent,…
Q: Suppose you work for a specialty food store. The owners are considering providing an e-commerce…
A: I would start by analyzing the situation to assess the strengths and weaknesses of such a goal as…
Q: Jeremiah took consulting work for the local jewelry business to help the owner understand their…
A: The term "expected value" refers to the value that is anticipated to be achieved on average by an…
Q: a. When the owner hires 4 workers, the average product of labor is b. The marginal product of the…
A: Total product is the total production of goods and services done by the workers. Average product of…
Q: The government wishes for Alonso to buy fewer sport cars because they create too much pollution. The…
A: Utility function shows the level of satisfaction derived from the consumption of goods. Budget…
Q: O False QUESTION 20 he beneficiary of a you those financially
A: A 12b-1 fee is a fee charged as operational fees for covering the marketing and Advertising cost. It…
Q: Paula hires Alfred to manage her store. The left column of the table below shows Alfred’s possible…
A: The efforts put by an employee in the production process of a firm, have deep impacts on the cost…
Q: . Free international trade stimulates economic growth by…
A: Since you have posted multiple questions, we will provide the solution only to the first question as…
Q: (1) What is the value of the Herfindahl-Hirshman index in this market? Please show all your…
A: introduction The capitalist economy always argues in favor of a free market system, where a large…
Q: A businessman is considering building a 25-unit apartment in a place near a progressive commercial…
A: Given, Rate of Return = 20% Number of Apartment = 25
Q: Define behavioral Economics and explain why it is different from traditional economics.
A: Introduction: Economics refer to the study of allocation of scarce resources in the presence of…
Q: Price $40- 30 20 10 0 $500 $1000 $2000 100 $4000 200 Marginal Revenue 300 Refer to Figure 15-8. What…
A: A monopoly has a single seller in the market having full control over the market.
Q: When the U.S government runs a Deficit, the savings curve in the market for loanable funds shifts to…
A: A budgetary deficit is implied as a situation in which the spending is greater than the income.…
Q: 4. Consider the following grenade game. First, player 1 chooses between giving player 2 $500 and…
A: Nash equilibrium refers to the situation when both the parties play in their self-interest and reach…
Q: In the following market model, P is price in time t, S and D are supply and demand functions. Assume…
A: Given information Supply function : S(Pt-1)=αPt-1Demand function: D(Pt)=1-bPt
Q: In the aggregate demand and aggregate supply model, when does the aggregate quantity of goods…
A: In AD/AS model, the aggregate demand curve will increase or shift to the right when any of the…
Q: Use the graph to answer the following: (a) At the optimal consumption point, approximately how many…
A: The combination of two goods which the consumer can buy from his given income is called budget…
Q: Consider a oligopoly with two firms. Each firm has constant marginal cost of 3 dollar per unit and…
A: Given information: P = 15 - Q ---> Market demand curve Where Q = Q1 + Q2 Q1 is the quantity…
Q: y-axis A 240 Zone 4 Zone 1 1 Zone 3 B Zone 2 In this graph, zone 2 is characterized by x-axis…
A: Swan model explains simultaneous existence of internal and external disequilibrium in the economy.
Q: Item A is currently in use at a plant. The original cost of the piece of machinery was $2,000. Its…
A: Given that; Initial cost of machinery A=$2000 Maintenance cost is $500 this year, increasing each…
Q: Diminishing Returns Jesaki Inc estimates that it will sell N(x) units of product after spending $x…
A: When the marginal product( MP) begins to rise or upto the point where marginal product curve has a…
Q: If government tax policy requires Peter to pay $15,000 in tax on annual income of $200,000 and Paul…
A: Taxation does more than only pay for public goods and services; it also plays a vital part in the…
Q: (Table: Demand for Wind-Powered Turbines) Use Table: Demand for Wind-Powered Turbines. The marginal…
A: Demand Schedule: Demand schedule for a good is a combination of different price and optimal quantity…
Q: 21. Government policies to reduce inequality and poverty include all of the following except a)…
A: Governments aim for economic development by promoting equity and reducing inequality and poverty…
Q: Determine whether the following represent examples of fiscal policy, monetary policy, or neither: A.…
A: Fiscal policy includes the set of tools that government uses to control the money supply in the…
Q: QUESTION 5 The price in an oligopoly market when companies compete is: O a Higher than in perfect…
A: Oligopoly market is a market form wherein there are a few firms only engaged in the production of…
Q: You are the manager of a firm and the research depertment has estimated the total cost function of…
A: Given TC function = 440 + 7.75q + 2.5q2 Production = 10 units In given TC function the fixed cost…
Q: To fight inflation, the Fed will: (Select all that apply) A. Sell securities on the open market.…
A: Monetary policy is the policy used by the central bank of the country to control the money supply in…
Q: Hi, where is P comes from? In the question, it says profit = ei - ci, how does pi*ei makes sense?
A: Now first we have to know the term profit. Profit is actually the difference between total revenue…
Q: Consider the cashflow (n = 10 years, MARR = e = Cash Flow A Investment P 180,000 Revenues P 350,000…
A: Given, Investment = P180,000 Revenue = P350,000 Expenses = P400,000 Salvage Value = P40,000 Time…
Q: YEAR 2000 2001 2002 A) 41 What is the price index in 2002? B) 100 C) 104 Nominal GDP $3055 D) 140…
A: Price index shows the change in price level. It is used to calculate the inflation in an economy.…
Q: The real rate of interest Select one: O a. is the same as the inflation rate. O b. is the rate a…
A: The money interest rate is also known as the nominal interest rate. The nominal interest rate is…
Q: When there is a technological advance in the cheese industry, consumer surplus in that market will…
A: The difference between the consumer's actual price for the good and the utmost price they would be…
Q: What is meant my the normative economics.
A: Positive statements are those that state a reality or something that can be verified. The positive…
Q: 1) Describe the Federal Reserve and its role
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Maximize the following utility function: U=4x 2 +3xy 2 +y 2 ; subject to the condition…
A: Given information Utility function U=4X2+3XY2+Y2 Budget constraint X+Y=60
Q: A company is considering an investment in an item of equipment costing $150,000. Contribution per…
A: Present value refers to the existing value of money which is to be received in the future at a given…
Q: What is tested in Figure 4? What is the conclusion? Note: anova(m3, m4, test="F") = getest (m3, m4)…
A: Timeseries data is used to analyze the impact of the independent variable on the dependent variable…
Q: Japan can make 12 widgets or 16 gadgets in one hour. Britain can make 3 widgets or 9 gadgets in one…
A: Opportunity cost is the cost of producing one good in terms of other good. Opportunity cost shows…
Q: 2. Suppose the Harrisonburg city council is concerned about the increase in crime in the city.…
A: Given that; It cost society $20000 when an offender is caught, tried and convicted they are sent to…
Q: Consider trade relations between Canada and Mexico. Assume that the leaders of the two countries…
A: Nash equilibrium refers to the best course of action of a player provided the strategy of rival firm…
Q: What the bank is holding - or it's reserve deposit A. Primary Reserve Occurs if the bank holds more…
A: The central bank of a nation sets the required reserve ratio and each commercial bank has to keep…
Q: O domestic absorption D D nominal exchange rates aggregate demand consumption real output
A: When two countries trade with each other, it is imperative that each country should aim to achieve…
Q: 45) First National Bank has $160 million in checkable deposits, $30 million in deposits with the…
A: Given information: Checkable deposit = $160 billion Deposit with the Federal reserve = $30 million…
Q: After 8 years of use, the heavy-truck engine-overhaul equipment at Pete's Truck Repair was evaluated…
A: The annual worth (AW) value for an option is included two parts: capital recovery for the initial…
Q: N5 The following data is provided for a PPP project. To the People To the Government…
A: A benefit-cost ratio is a marker, utilized in cost-benefit analysis, that endeavors to sum up the…
Q: What is cash equivalents?. Define it with the context of economics.
A: Cash refers to the liquid form of currency that can be used to purchase goods and services. Cash can…
Step by step
Solved in 6 steps with 4 images
- Suppose that two European electronics companies, Siemens (Firm S) and Alcatel-Lucent (Firm T), jointly hold a patent on a component used in airport radar systems. - Demand for the component is given by the following function \[ P=1,000-Q \] - The total cost functions of manufacturing and selling the component for the respective firms are \[ \begin{array}{c} T C_{S}=70,000+5 Q_{S}+0.25 Q_{S}^{2} \\ T C_{T}=110,000+5 Q_{T}+0.15 Q_{T}^{2} \end{array} \] Assume that the firms agreed to form cartel and calculate the joint profit.Exercise 6.8. Two companies with cost functions C1 (q1 )=5q1 and C2 (q2)= 0.5 q2 ² supply the to the same market. If the inverse market demand function is given by P = 100 - 0,5Q , where Q = q₁ + q₂ , find a) The production level of each firm, the price and the profits if the companies compete according to the Cournot model. (b) The level of production of each undertaking, the price and the profits if the undertakings agree to jointly maximise their profits. Show the results with the help of graphs.You are the manager of BlackSpot Computers, which competes directly with Condensed Computers to sell highpowered computers to businesses. From the two businesses’ perspectives, the two products are indistinguishable. The large investment required to build production facilities prohibits other firms from entering this market, and existing firms operate under the assumption that the rival will hold output constant. The inverse market demand for computers is P=5900-Q , and both firms produce at a marginal cost of $800 per computer. Currently, BlackSpot earns revenues of $4.25 million and profits (net of investment, R&D, and other fixed costs) of $890,000. The engineering department at BlackSpot has been steadily working on developing an assembly method that would dramatically reduce the marginal cost of producing these high-powered computers and has found a process that allows it to manufacture each computer at a marginal cost of $500. How will this technological advance impact your…
- You are the manager of a firm that manufactures front and rear windshields for the automobile industry. Due to economies of scale in the industry, entry by new firms is not profitable. Toyota has asked your company and your only rival to simultaneously submit a price quote for supplying 100,000 front and rear windshields for its newest version of the Highlander. If both you and your rival submit a low price, each firm supplies 50,000 front and rear windshields and earns a zero profit. If one firm quotes a low price and the other a high price, the low-price firm supplies 100,000 front and rear windshields and earns a profit of $11 million and the high-price firm supplies no windshields and loses $2 million. If both firms quote a high price, each firm supplies 50,000 front and rear windshields and earns a $6 million profit. Determine your optimal pricing strategy if you and your rival believe that the new Highlander is a “special edition” that will be sold only for one year. Would your…Assume the market shares of the six largest firms in an industry are 15 percent each. The six-firm concentration ratio would indicate that the industry is highly concentrated, while the Herfindahl- Hirschman Index would not. True OR False? If the inputs to a production process are perfect substitutes and the marginal rate of technical substitution is equal to the ratio of the prices of the two inputs, the firm can choose from a virtually infinite array of combinations of the two inputs to minimize the costs of producing a given level of output. True OR False?You are the manager of BlackSpot Computers, which competes directly with Condensed Computers to sell high-powered computers to businesses. From the two businesses’ perspectives, the two products are indistinguishable. The large investment required to build production facilities prohibits other firms from entering this market, and existing firms operate under the assumption that the rival will hold output constant. The inverse market demand for computers is P = 5,900 − Q, and both firms produce at a marginal cost of $800 per computer. Currently, BlackSpot earns revenues of $4.25 million and profits (net of investment, R&D, and other fixed costs) of $890,000. The engineering department at BlackSpot has been steadily working on developing an assembly method that would dramatically reduce the marginal cost of producing these high-powered computers and has found a process that allows it to manufacture each computer at a marginal cost of $500. How will this technological advance impact…
- Suppose that Kenya Railways serves two major separate customers, namely: urban users and rural users of the railway line. The company can charge different prices to these two customers. Suppose that the total cost for running trips by Kenya Railways is given by the following cost function: C= 25+10Q Where: C = total cost Q = total output of trips made by the railway line The inverse demand functions for the two customers are given as follows: P1 = 40-5Q1 P2 =90-2Q2 Where: p1 = Price charged to urban users; and is number of trips by urban users p2 = Price charged to rural users; and is number of trips by rural users Required: How many trips should Kenya Railway serve in each market and what price should the firm charge in each market? Compute the profits of Kenya Railways without price discrimination From your knowledge of the relationships between various costs of production, fill in the blanks of Table 1 below: Table 1 Q TC…Additional Problem 3: Assume two companies (C and D) are Cournot duopolists that produce identical products. Demand for the products is given by the following linear demand function: ? = 600 − ?C − ?D where ?C and ?D are the quantities sold by the respective firms and P is the price. Total cost functions for the two companies are ??C= 25,000 +100?C 2 ??D = 20,000 + 125?D c. Determine the equilibrium price and quantities sold by each firm. d.Determine the profits for the market as well as eachfirm.You are the manager of a firm that manufactures front and rear windshields for the automobile industry. Due to economies of scale in the industry, entry by new firms is not profitable. Toyota has asked your company and your only rival to simultaneously submit a price quote for supplying 100,000 front and rear windshields for its new Highlander. If both you and your rival submit a low price, each firm supplies 50,000 front and rear windshields and earns a $1 million in profits. If one firm quotes a low price and the other a high price, the low-price firm supplies 100,000 front and rear windshields and earns a profit of $11 million and the high-price firm supplies no windshields and loses $2 million. If both firms quote a high price, each firm supplies 50,000 front and rear windshields and earns a $6 million profit. The new Highlander is a “special edition” that will be sold only for one year. a. Supported by this information, complete the payoff matrix. (values are in million)…
- Consider the following model of Cournot competition with fixed cost. There are two identical firms, and the inverse demand function is given byP(q1,q2) = 19−(q1 +q2). Firms have constant marginal cost, but any firm operating in this market (that is, qi > 0) must pay a license fee F . In particular, firm i’s cost function is ( attached below ) a) Derive the firms’ best response functions. (b) For what values of F, if any, will there be a symmetric (pure) Nash equilibrium in which firms produce a positive quantity? What is the Nash equilibrium in that case? (c) For what values of F, if any, will both firms shutting down be the symmetric (pure) Nash equilibrium?Consider a homogeneous good industry (such as an agricultural product) with just two firms and a total market demand Q = 400−P, so the inverse demand is P = 400 − Q. Suppose both firms have a constant marginal cost equal to $100 per unit of output and a fixed cost equal to $10,000. Suppose that the firms compete by simultaneously setting price, not simultaneously setting output. That is, suppose we consider the Bertrand model instead of the Cournot. Show that the two firms must earn lower profits. Hint: Create a two-by-two game using two different prices for each firm. One price should be the Cournot price (the Cournot is price of the good when firms produce the Cournot output you found above, which is 100 and 100, so the price is P = 400 − 100 − 100 = 200). The second price should be under 200 and over 150. Then show that the Nash equilibrium of this game is the lower of the two prices. When calculating profits, assume that each firm has equal sales (one half of demand) if they charge…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…
