Three electricity generating firms are competing in the market with the inverse demand given by P(Q) = 20 -Q. All firms have constant marginal costs. Firm 1's marginal cost is MC = 5; it has a capacity constraint of K1 = 5 units. Firm 2's marginal cost is MC = 8; it has a capacity constraint of K2 = 2.5 units. Firm 3's marginal cost is MC = 10; it has a capacity constraint of K3 = 2.5 units. A. The three firms compete in the style of Cournot. Please compute the Nash equilibrium quantities. Also compute the price in the Nash equilibrium. B. Which of these firms would have produced a larger quantity if it had a larger capacity? Please explain.
Q: community surplus is maximized (i.e. Pareto optimality is achieved) when: a market is in…
A: Community surplus is the sum of consumer surplus and producers surplus at a given market price and…
Q: Suppose two firms producing identical products compete in prices. If demand can be written as Q = a…
A: Oligopoly is referred to as a market structure where there are a small number of firms and these…
Q: The profit maximizing condition for a purely competitive firm is when... Group of answer choices…
A: A perfect competition is a structure of a market in which there are many sellers and buyers. The…
Q: Determine the profit-maximizing prices when a firm faces two markets where the inverse demand curves…
A: This is a case of ordinary price discrimination: Segregate consumers into market segments and…
Q: Consider a wholesale electricity market with two types of generators: coal plants and natural gas…
A: 2 types of generators in a competitive market Type 1: Coal Plant Number of generators = 10 Capacity…
Q: Verizon can be viewed as a first mover. Now suppose both ATT and Verizon are considering whether…
A: P = 900 – q1- q2 a) In the first stage, Verizon has a large scale supermarket, and as a result, ATT…
Q: A dominant or price setting firm and several smaller price takers serve a market where total market…
A: The total market demand is Qd=560–2P and the combined supply from all the smaller firms is…
Q: Consider a Japanese firm that sells product Y in the local market and contemplates sales to the US.…
A: Since we answer a maximum of 3 sub-parts, 1-c will be answered here. Please re-upload the question…
Q: Suppose the total monthly demand for golf services is Q = 20 − P. The marginal cost to the firm of…
A: The demand function is given as Q=20-P and the MC (marginal cost) is $1. By equating MC=P; Thus, in…
Q: Consider a number of firms facing identical total cost function of the form: TC = Q3 -6Q2+10Q. The…
A: The money spent to purchase the factor of production to produce the goods and services is termed as…
Q: Your company is going to produce two versions of its new video game systems, Boxy-x,B1, and…
A: Bertrand's duopoly is the one in which firms simultaneously decide prices for the goods.
Q: The two major producers in the beer industry, Anheuser-Bush (Firm 1) and Grupo Modelo (Firm 2) are…
A: For the level of output and profits when Firm 2 cheats and Firm 1 colludes, firstly we find the…
Q: In Nyeri town there are only two milk processors. The local inverse demand for milk is given by: Q =…
A:
Q: The inverse demand for tea is given by P = 12 – 0.03Q, where Pis the price per a gram of tea and Qis…
A:
Q: Dunder Mifflin sells specialty paper to commercial clients in the Scranton area. Some of Dunder…
A: A monopoly is a single seller in the market which sets the price of its good and thus, is a price…
Q: Suppose that BMW can produce any quantity of cars at a constant marginal cost equal to $50 and a…
A: The demand function gives us an idea about the optimal prices and quantities to be set given the…
Q: As the manager of Smith Construction, you need to make a decision on the number of homes to build in…
A: Chances of low demand = 60 percentInverse demand function, P = 300,000 – 400QChances of high demand…
Q: Two farmers produce milk for local town with local milk demand given by Q=100-1/3P (P denotes price…
A: According to the question Q=100-1/3P TC=150+2q Q= output of both the farmers i.e Q1+Q2
Q: Suppose that BMW can produce any quantity of cars at a constant marginal cost equal to $20,000 and a…
A: Profit maximizing level of output is at the point where marginal cost (MC) equals marginal revenue…
Q: A firm with market power faces the demand function, q = 150 – 10P. The firm's marginal cost function…
A: In the second-degree price discrimination, there is an entry fee and usage fee. The consumer has to…
Q: The inverse demand for tea is given by P= 8 – 0.03Q, where Pis the price per a gram of tea and Q is…
A: Both shop have same cost structure and therefore their reactions function and the output are going…
Q: Consider an industry with with two, price-taking firms, the firms face an (inverse) demand function:…
A: Price taking firms are those firms which have to agree to the prices of goods and services…
Q: Solve for the Bertrand equilibrium for the firms described below if Firm 1's marginal cost is $15…
A: In a Bertrand competition there are 2 firms competing with each other in terms of price. The firms…
Q: Walmart can be viewed as a first mover. Now suppose both Walmart and HEB are considering whether…
A: P = 900 – q1 – q2 For small store, I = 50,000 And MC = 0 For super market I = 1,75,000 And MC = 0
Q: Consider two Cournot firms, Firm A and Firm B. Firm A has a marginal cost of 10 and Firm B has a…
A:
Q: Walmart can be viewed as a first mover. Now suppose both Walmart and HEB are considering whether…
A: The inverse demand function is given as: a. Walmart stays out of market q1 = 0 and HEB also chooses…
Q: Walmart can be viewed as a first mover. Now suppose both Walmart and HEB are considering whether…
A: P = 900 – q1- q2 a) In the first stage, Walmart has a large scale supermarket, and as a result, HEB…
Q: Aidan and Celina are the only sellers of Jack Russell Terrier (JRT) in Antigua. Celina chooses her…
A: Aidan knows how Celina will react and chooses the number of JRTs that she herself will sell, q2,…
Q: The demand function for a truckload of firewood in a small town with a college is Q = 200 - 1.5p for…
A: Demand function for college students:- Q = 200 - 1.5P Demand function for non students:- Q = 200 - p
Q: Walmart can be viewed as a first mover. Now suppose both Walmart and HEB are considering whether…
A: The inverse demand function is given as: a. Walmart stays out of market q1 = 0 and HEB also chooses…
Q: Three electricity generating firms are competing in the market with the inverse demand given by P(Q)…
A:
Q: total cost function of one of the firms is expressed by C(Q) = 100 + 4Q2, and demand is P = 80 – 4Q…
A: A monopoly is a sole producer of a good in the market thus acting as a price maker whereas in a…
Q: Pizza Hut and Dominoís are considering to open a shop in a new shopping precinct in Burwood. Suppose…
A: Given: Total costs (TC): Pizza hut: TCP = 5Q + 6000 Domino's: TCD = 5Q+ 6000 Price that both…
Q: Consider a homogeneous product industry with inverse demand given by p(Q) = 100 – 20. There is…
A: Since you have posted a question with multiple sub-parts, we will solve the first 3 sub-parts for…
Q: There are 1000 pear producers that have identical cost functions, C= 200+0.025q2 where q is the…
A: The structure of a market where there are a large number of buyers and sellers selling homogenous…
Q: Walmart can be viewed as a first mover. Now suppose both Walmart and HEB are considering whether…
A: Given that. P = 900 – q1 – q2 For small store, I = 50,000 And MC = 0 For super market I = 1,75,000…
Q: Consider two firms that produce the same product and sell it in a market with the following demand…
A: Nash Equilibrium is defined as the state where a player gets his desired outcome without deviating…
Q: Aidan and Celina are the only sellers of Jack Russell terrier (JRT) in Antigua. Celina chooses her…
A: For celina, quantity of aidan is given is q2
Q: Walmart can be viewed as a first mover. Now suppose both Walmart and HEB are considering whether…
A: The inverse demand function is given as: a. In the first stage, Walmart has a large scale…
Q: Suppose] A Cmpany is the sole provider of electricity in the various districts of Dubai. To meet the…
A: Profit for facility 1 = MR1 = MC1 MR1 = d(TR)/dQ1 TR1 = (1200 -4(Q1+Q2))Q1 TR1 = 1200Q1 - 4Q12 -…
Q: Q.2 Two firms produce homogeneous products. The inverse demand function is: p(x₁, x₂) = a x₁- x2,…
A: Cournot is quantity competition, and Bertrand is price competition. Both are simultaneous move…
Q: AOF is the only firm selling beer around Isla Vitas, which has a beer fountain in the backyard so…
A: Demand is defined as an economic principle which refers to a consumer's desire to buy a good or a…
Q: AOF is the only firm selling beer around Isla Vitas, which has a beer fountain in the backyard so…
A: When a monopolist charges two different prices for the same good from two groups of consumers, then…
Q: The second largest public utility in the nation is the sole provider of electricity in 32 counties…
A: Inverse demand function, P=1200-4QTC of firm 1, C1(Q1)=8000+6Q12TC of firm 2, C2(Q2)=6000+3Q22
Q: The market for a standard-sized cardboard container consists of two firms: CompositeBox and…
A: Merger A merger is an agreement that amalgamates two existing companies into one new company. There…
Q: . The second-largest public utility in the nation is the sole provider of electricity in 32 counties…
A: Given, the demand function is: With the help of given equations profit function can be determined…
Q: Suppose] A Cmpany is the sole provider of electricity in the various districts of Dubai. To meet the…
A: We are going to find the revenue function, marginal revenue function to answer this question. .
Step by step
Solved in 2 steps
- Ticket Price, Cost ($) 10 8 00 D₁ = Dx+DA MC = ATC MRT 20 28 38 10 0 Adult Tickets DK 6 4 MC = ATC MRK Children's Tickets 20 20 1. The Figure above describes demand and cost conditions facing the Salinas Cinema-Plex. Note that marginal costs are constant ($). The demand for Cinema-Plex movie tickets by adult patrons is given by DA and by child patrons Dk. a) Calculate total revenue from ticket sales IF the Cinema-Plex did NOT practice 3rd degree price discrimination, but rather charged a single price to adult and child patrons. b) Calculate the total number of tickets sold if the Cinema-Plex DID practice 3rd degree price discrimination. c) Calculate the change in consumer surplus (CS) received by adult patrons if the Cinema-Plex shifted from a single price to a 3rd degree price discrimination regime. d) How much (economic) profit does the Cinema-Plex stand to gain by engaging in 3rd degree price discrimination?4. A vertically integrated automobile company has an upstream engine division and a downstream assembly division. The demand for the company's cars is given by Q = 20-P. Each car requires one engine. The downstream division's total cost of assembling cars is TCD(Q) = 4Q. The upstream division's total cost of producing engines is TCv (Q) = Q². (a) Suppose that there is no outside market for engines. What is the price and quantity of cars produced by the company? (b) Suppose that there is no outside market for engines. What should be the transfer price for engines? [Hint: the transfer price of an engine should equal the marginal cost of engine production at the optimal quantity.] (c) Suppose that there is a competitive outside market in which the price of an engine is 12. What is the price and quantity of cars produced by the company? (d) Suppose that there is a competitive outside market in which the price of an engine is 12. What is the quantity of engines that the company buys or…Attempt all questions. Q1. a) A local Pepsi company has total costs of production given by the equation TC-500+10q+Sq2. This implies that the firm's marginal cost is given by the equation MC 10+10q. The market demand for cold drink is given by the equation QD-105 (1/2)*P. Write the equations showing the company's average total cost and average variable cost and average fixed cost, each as a function of q. Show the firm's MC, ATC and AVC on one graph. What is the breakeven price and breakeven quantity for this firm in the short run? What is the shutdown price and shutdown quantity for this firm in the short run? If the market price of the output is $50, how many units will this firm produce? iv) Assuming the cold drink industry is perfectly competitive, what output would be produced by the firm in long-run equilibrium? What would be the long-run equilibrium price? i) ii)
- Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh Q1 = 12 – P1Sri Lanka Q2 = 8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) Required. Determine the company’s total profit function. Also, (i) What are the profit maximizing levels of price and output for the two markets? (ii) Calculate the marginal revenues in each market.? 2. Now consider two cases: (i) Company is effectively able to price discriminate in the two markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging thesameprice in the two markets what are the profit…ASAP PLZ You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(Qi) = 2Qi, and the inverse market demand curve for this unique product is given by P = 650 −3 Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $1,800, Taurus Technologies can bring its product to market before Spyder finalizes production plans. (Assume Taurus Technologies is the leader in this scenario.)What are your profits if you do not make the investment? $ ____What are your profits if you do make the investment?Instructions: Do not include the investment of $1,800 as part of your profit calculation. $ ____ Should you invest the $1,800? multiple choice Yes - the benefits of establishing…2. You are the Southeastern Michigan regional manager at Coca-Cola, responsible forproduction and pricing in the Metro Detroit area. Your primary competitor is Pepsi. The marketresearch team at Coca-Cola is thinking about launching a new product, Orange Vanilla Coke, toboost the brand. The cost function to produce a 12-pack of 12 fl. oz. cans of Orange VanillaCoke is C(qcoke) = 0.25qcoke and the market research team has estimated inverse market demandfor a 12-pack of this new “pop” in Southeastern Michigan to be P = 10.25 – 0.00025Q. a. Assuming Pepsi decides not to produce a similar product, allowing Coca-Cola to maintainmonopoly power in the market for orange vanilla cola, what price and quantity will youchoose to maximize profit? How much profit does Coca-Cola earn?b. What price and quantity you would choose to maximize profit if Pepsi spies discover yourproduct before launch, allowing Pepsi to produce and launch an identical product at the sametime. For your answer, assume the cost…
- Wakanda is a firm that solely supplies vibranium to Marley and Paradis. The demand function of the Marley market is given as QM=110-PM , and the demand function of the Paradis market is QP=30-PP . Wakanda’s total cost in producing vibranium is given as TC=100+10Q , where represents a ton of vibranium. 5. Compute the mark up price on each market and interpret the results.Question Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh Q1 = 12 – P1 Sri Lanka Q2 = 8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) Now consider two cases (i) Company is effectively able to price discriminate in the two markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging the same price in the two markets what are the profit maximizing levels of price, output, and the total profits? c. Analyze, with graphs, the two alternative pricing strategies…34 A firm with two plants, A and B, has the following estimated demand and marginal cost functions: Qd=120 - 10P MCA = 4 + (1/5) QA MCB=6+ (1/10) QB What is the firm's total marginal cost function? Multiple Choice MC = 24+ (1/50)Q MC = 10 + (3/15) Q MC = (80 / 15) + (1/15) Q MC = 2 + (1/10)Q O
- Wakanda is a firm that solely supplies vibranium to Marley and Paradis. The demand function of the Marley market is given as QM=110-PM , and the demand function of the Paradis market is QP=30-PP . Wakanda’s total cost in producing vibranium is given as TC=100+10Q , where represents a ton of vibranium. 3. How much is the total cost of production? 4. Assuming that Wakanda can price discriminate between Marley and Paradis market, calculate its total profits.The demand for home firm product is given by the inverse demand function: P = 120 −QD. The company’s costs are: T C = 20Q+ 200 and MC = $20.2. Suppose the home country open up to free trade and a foreign competitor enters the market. Assume thatthe foreign firm has the same cost structure as the home firm (the monopoly from the previous question).A) Derive the best response function for each firm (h-home and f-foreign)B) Find each firms’ output, the home market price, and each firms’ profit from the home marketRound off your final answer to whole #. A company produces and sells a consumer product and is able to control the demand by varying the selling price. The approximate relationship between price and demand is 2700 5,000 p=47 + -forD>1 D D² The company is seeking to maximize its profit. The fixed cost is $1,000 and the variable cost is $39 per unit. What is the number of units that should be produced and sold each month to maximize profit?