Please label the scenarios with the term that best matches them. Bauer and CMM are duopolists in the hockey skate market. Suppose every year Bauer produces one million pairs of skates. CMM produced one million skates the first year but has since chosen to produce 1.5 million pairs of skates each year. Unilever and Proctor & Gamble are fined 315 million euros for price-fixing the washing detergent market in Europe. Zyrtec, Allegra, and Claritin, antihistamines used frequently for allergies, place ads on TV promoting the superiority of their drug. At the beginning of a new year, Canon displays the prices for its newest line of camera lenses. Nikon, Sigma, and Tamaron, other camera makers, follow with their prices soon after, set near Canon's prices. Sprint, AT&T, and T-Mobile keep undercutting each other's prices in order to gain a larger customer base. none of these terms antitrust policy Answer Bank Nash equilibrium non-price competition price war price leadership

Please label the scenarios with the term that best matches them. Bauer and CMM are duopolists in the hockey skate market. Suppose every year Bauer produces one million pairs of skates. CMM produced one million skates the first year but has since chosen to produce 1.5 million pairs of skates each year. Unilever and Proctor & Gamble are fined 315 million euros for price-fixing the washing detergent market in Europe. Zyrtec, Allegra, and Claritin, antihistamines used frequently for allergies, place ads on TV promoting the superiority of their drug. At the beginning of a new year, Canon displays the prices for its newest line of camera lenses. Nikon, Sigma, and Tamaron, other camera makers, follow with their prices soon after, set near Canon's prices. Sprint, AT&T, and T-Mobile keep undercutting each other's prices in order to gain a larger customer base. none of these terms antitrust policy Answer Bank Nash equilibrium non-price competition price war price leadership

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter12: Price And Output Determination: Oligopoly

Section: Chapter Questions

Problem 2E

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MelCo’s Xamoff The global pharmaceuticals giant, MelCo, has had great success with Xamoff, and over-thecounter medicine that reduces exam-related anxiety. A patent currently protects Xamoff from competition, although rumors persist that similar products are in development. Two years ago, MelCo sold 25 million units for a price of $10 for a package of ten. Last year it raised the price to $11, and sales fell to 22 million units. Finally, a financial analyst estimates the cost of production at $2 per package. (a) Estimate the elasticity of demand for this product at $10. Is this price too high or too low? (b) Estimate the elasticity of demand for this product at $11. Is this price too high or too low? (c) Based on your answers to (a) and (b), what can we say about MelCo’s profit-maximizing price?
Two firms produce identical products at zero cost, and theycompete by setting prices. If each firm charges a low price,then both firms earn profits of zero. If each firm charges ahigh price, then each firm earns profits of £30. If one firmcharges a high price and the other firm charges a low price,the firm that charges the lower price earns profits of £50, andthe firm charging the higher price earns profits of zero. (a) Which oligopoly model best describes this situation?(b) Write this game in normal form.(c) Suppose the game is infinitely repeated. Can theplayers sustain the "collusive outcome" as a Nashequilibrium if the interest rate is 50 percent? Explain. Please answer the a, b and c parts.
Boulder has several ski and snowboard retailers that sell similar brands. Prices across these retails are relatively stable during preseason (ski/snowboard season) and midseason, but become volatile postseason. For the past few years, when one retailer slashed prices (especially postseason), other retailers followed suit. All retailers behave as oligopolists. Suppose that retailer A faces an inverse demand of p = 1,500 – 1.5Q, when the other retailers match retailer A’s price changes, and p=1200 – 0.7Q, when the other retailers don't match retailer A’s price changes. Suppose also that retailer A's cost function is C(Q) = 20,000 + 10Q + 0.8Q2. Question: Under these conditions, what is the most profit retailer A can make?
Suppose Mattel, the producer of Barble dolls and accessorles (sold separately), has two types of consumers who purchase Its dolls: low-value consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay of $44. Each of the high-value consumers buys one doll and two accessorles and Is willing to pay $82 In total. Mattel Is currently considering two pricing strategles: • Strategy 1: Sell each doll for $22 and each accessory for $22 • Strategy 2: Sell each doll for $6 and each accessory for $38 In the following table, Indicate the revenue for a low-value and a high-value customer under strategy I and strategy 2. Then, assuming each strategy is applied to one low-value and one high-value customer, indicate the total revenue for each strategy. Revenue from Low-Value Revenue from High-Value Total Revenue from Customers Customers Strategy $44 Value, 1 Accessory S82 Value, 2 Accessories (s) ($) (s) Strategy 1…
Mary owns a mobile boutique. Several of her local competitors have recently closed their businesses, which has resulted in a shift in her perceived demand curve. The following tables show her old and her new perceived demand. Original Demand Curve Price Quantity TC $20 0 $1,000 $18 100 $1,100 $16 200 $2,000 $14 300 $4,000 $12 400 $7,000 New Demand Curve Price Quantity TC $25 0 $1,000 $23 100 $1,100 $21 200 $2,000 $19 300 $4,000 $17 400 $7,000 How much does Mary's price change after her competitors leave the market? Question 21 options: decrease by 3 increase by 3 increase by 4 decrease by 4
You are a producer in a monopolistically competitive market of a good that is seen as being critical in the fight against the coronavirus (use hand sanitizer as an example), assume prior to the virus outbreak you had been producing a quantity that equated MR to MC and thereby allowed you to optimize your profitability. Further assume the price you are authorized to sell the product for has now been frozen by government order, and you have been mandated by government order to increase the quantity of the product you must produce to service the spike in market demand. Explain what you believe will happen to the profitability of this firm including in your answer what will happen to MC as your output expands and to your MR as price is forced to remain constant.
Suppose than an oligopolist is charging $20 per unit of output and selling 28 units each day. What is its daily total revenue? $ Also suppose that previously it had lowered its price from $20 to $18, rivals matched the price cut, and the firm's sales increased from 28 to 29 units. It also previously raised its price from $20 to $29, rivals ignored the price hike, and the firm's daily total revenue came in at $550. Which of the following is most logical to conclude? The firm's demand curve is a curve with a kink in it
Suppose than an oligopolist is charging $20 per unit of output and selling 28 units each day. What is its daily total revenue? $ Also suppose that previously it had lowered its price from $20 to $18, rivals matched the price cut, and the firm's sales increased from 28 to 29 units. It also previously raised its price from $20 to $29, rivals ignored the price hike, and the firm's daily total revenue came in at $550. Which of the following is most logical to conclude? The firm's demand curve is (Click to select) < Prev Ne 28 of 50
Rawlding is a manufacturer in the oligopolistically competitive market for footballs. Two other manufacturers, Spaldon and Wilke, compete with Rawlding for football consumers. Rawlding faces the demand curve for footballs depicted on the graph. Initially, Rawlding charges $30 per football, producing and selling 7 million footballs per year. PRICE (Dollars per ball) 36 35 34 33 32 31 30 29 28 27 26 O 7 8 FOOTBALLS (Millions of balls) 9 10 G As an oligopolist, Rawlding is a price maker. If Rawlding raises the price of its football from $30 to $32 per ball, the quantity of Rawlding footballs demanded by million footballs per year. If Rawlding reduces the price of its football from $30 to $28 per ball, the quantity of by million footballs per year. (Hint: Click on the points on the graph to see their coordinates.) footballs demanded If Rawlding raises the price of its football above $30, the kinked demand curve model suggests that Spaldon and Wilke will respond by The portion of Rawlding's…
QUESTION 4: The graph below shows the demand and costs data for a one of firms operating in a market with a highly differentiated product/All underlying work must be shown MC ATC $11.50 $10.00 $9.00 $6.00 D MR 200 400 700 s00 Quantity A) Refer to the graph above. If the firm in the graph above maximizes profit, it will produce units of output and charge price per unit. A) 400; $10 B) 600; $6 C) 900; $9 D) 600; $11.50 B) Refer to the graph above. At the profit maximizing output level, the firm from above will earn: A) zero economic profit. B) $900 total economic profit. C) $2,700 economic profit. D) $2,700 economic loss. C) Refer to your answer above. You can conclude that if there are no barriers to entry: a) new fims will enter this industry in the long run in a search of profit. b) existing firms will exit this industry in the long run because of the short-run losses. c) this industry is in long-run equilibrium, and there are no incentives to enter or exit. d) the price per unit of…
Suppose that the market demand for facial mud packs are given as follows: P = 2.200 - Q. Mud packs can be produced at no cost. Determine the level of output that would be produced by each firm in a cournot duopoly in the long run. Calculate th price charged for mud packs. Show all calculations.
The market for knitted scarves at a local, weekend farmers' market is a Stackelberg duopoly. Sammy's Scarves acts as the Stackelberg leader and Knitting Nancy as the Stackelberg follower. Both Sammy and Nancy know that the market demand for knitted scarves at the farmers' market is: Q=320-4P where Q is the quantity of knitted scarves demanded and P is the price of a knitted scarf. Solving the market demand for P as a function of Q gives the inverse market demand: P-80-0.25Q. Sammy produces qs knitted scarves, and Nancy produces q knitted scarves. Each incurs a total cost of producing q; knitted scarves of TC (91)= =30+20q Sammy will sell 140 knitted scarves and Nancy will sell 70 knitted scarves at the local, weekend farmers' market.