Now, assume your buffalo wing firm is in a Cournot oligopoly with 3 additional firms. The market elasticity of demand for buffalo wings is -0.70. Find your firm’s elasticity of demand. Now find the profit-maximizing price for your firm if your marginal cost is $3.70.
Q: Describe the major risks ( Economic Risk & Political Risk) of international diversification.
A: International diversification entails a number of risks. Political and economic risks are the most…
Q: Compared to last year, more television sets are being bought while the selling price has risen. This…
A: The direct relation between price and quantity demanded is studied under the concept of the Law of…
Q: Consider production function f(L, K) = 10VLK and input prices w = 10,r = 90.
A:
Q: 1) The employment of teaching assistants (TAs) by major universities can be characterized as a…
A: A monopsony basically refers to a market where there is only one buyer. The market is called an…
Q: The U.S. economy is experiencing a recession. In order to smooth the economy the Federal Reserve…
A: Given: Increase in money supply=$25 billion Reserve requirement=10%
Q: what is the significance of Consumer Preference to government agents?
A: Understanding consumer preferences can help you predict consumer demand because it determines what…
Q: Assume a firm's short run total cost is STC = cSR = 10q + 10,/q + 10. Compute its marginal cost and…
A: Given Firm's short-run cost function STC(q)=10q+10q+10 ... (1)
Q: Assume MPC = 0.7, MPM = 0.2 and the Keynesian expenditure multiplier is 1.75, then the MPT must…
A:
Q: According to the AS-AD model, which of the following is true about output when there is an increase…
A: "Macro-economic equilibrium is attained at a point where aggregate demand (AD) equates(intersects)…
Q: Which pair below are examples of automatic stabilisers? O taxes and welfare payments saving and…
A: When talking about automatic stabilizers, it can be said that these are the government programs or…
Q: using the dornbusch model Use the set of graphs with IS-LM to explain in a simple manner what…
A: IS relation : Depicts all the equilibrium points on a (r , y ) on which the goods market is in…
Q: In 2017, the median price of electric vehicles in the US was 64.300 thousand dollars/car and 199.826…
A: Answer: Given, Price of vehicles in the US in 2017 = 64.300 thousand dollars/car Car sold = 199.826…
Q: 4 4 Q(K1, K2) = K}K The price of one unit of K1 is 160, and the price of one unit of K2 is 5. Solve…
A: The production function: Q(K1,K2)=K145K245 .... (1) Price of input K1=160 Price of input…
Q: model of an economy with the following equa Yd he fiscal policy multiplier with respect to incon
A: *Answer:
Q: ce of limits on the behavior of large intermediaries, how might the perception of institutions being…
A: The moral risk is a significant concern when giving a security net. This is on the grounds that,…
Q: Salina advertises her production of home workout supplies. Initially an exercise floor pad is sold…
A: Given data, Price Quantity 25 50 35 40
Q: One of Friedman’ s criticisms of Keynes was Multiple Choice current consumption depends only on…
A: When understanding the nature and functioning of an economy, there are various theories developed by…
Q: Consider production function f(L, K) = 10VLK and input prices w :10,r = 90.
A:
Q: Determine the optimal strategy for the situation by representing it as a game and finding the saddle…
A:
Q: What is the main purpose of the Federal Reserve Bank's regulatory oversight of banks? to maximize…
A: The central bank of the United States which was being created by Congress which is also known as the…
Q: Milton Friedman argued nearly all economic fluctuations were caused by Multiple Choice sticky…
A: The correct option is money supply. Milton Friedman argued nearly all economic fluctuations were…
Q: What could cause an increase in the supply of Argentine pesos on the foreign exchange market? …
A: The foreign exchange market, that is also known as the over-the-counter market, is a decentralised…
Q: Explain FOUR (4) unethical practices in oligopoly markets.
A: Oligopoly is a market structure in which there are few firms in the market who get together and run…
Q: How many total pure and mixed-strategy equilibria does the game below have? Player 2 y a 3, 3 4, 2…
A: We can use the best response method to find out the PSNE where underlying the maximum payoffs to…
Q: Describe an industry with monopolistic competition and identify an example in Canada.
A: Monopolistic competition: - monopolistic market structure is the structure in which there is a large…
Q: U3. Fast forward a decade beyond the situation in Exercise S3. Yuppietown's demand for bread and…
A: Given information Q1=8-P1-0.5P2 Q2=16-0.5P1-P2 MC of loaf of bread=$1 MC of pound of Cheese=$2
Q: The marginal cost curve: is a vertical line. generally rises at first and then declines as output…
A: Marginal cost is the cost of producing additional unit of output. The shape of marginal cost depends…
Q: Answer all questions from this section. For each question, identify the statement as True, False, or…
A: A.1 Quantitative easing (QE) is an unconventional monetary policy in which a central bank buys…
Q: Suppose that Sam has a utility function u(x, y)= x+y where x is the amount of good 1 and y is the…
A: Py = 20 , px = 30 , px' = 10 and M=90
Q: (EYAX) = B_0+B_1) XU does not imply w ich of the following: Select one: O a. 1 unit increas of X…
A: Answer (d) Y = B0 +B1 X for all units in population Explanation: No all the units in population i.e.…
Q: In a mixed strategy equilibrium of the game below, what is the probability with which Player 2…
A: To find the PSNE, we will use the best response method to underline the maximum payoff to a player…
Q: 25. What will happen to the price and quantity of footballs as a result of an increase in the price…
A:
Q: A necessary condition for a natural oligopoly is that Select an answer and submit. For keyboard…
A: There are different forms of a market which are classified according to the characteristics of a…
Q: Price ($)Quantity Demanded Quantity Supplied 200 26,000 12,000 23,000 20,000 245 16,000 290 20,000…
A:
Q: Bill's income is $1,000 and his net taxes are $250. His disposable income is Select one: O a. $750 O…
A: After income taxes have been subtracted, disposable income, also known as disposable personal income…
Q: 5. The marginal benefits (MB) and marginal damage costs (MD) for daily particulate air pollution in…
A: Disclaimer: Since it is a multipart question, I am providing the answers to the first three…
Q: The market for good B is in equilibrium. Then a technological innovation reduces costs of production…
A: Equilibrium is the condition in which economic forces are perfectly balanced.
Q: Leonard, a company that manufactures explosion-proof motors, is considering two alternatives for…
A: Present worth" it is the concept that states an amount of money today is worth more than that same…
Q: Identify the statement as True, False, or Uncertain, and explain in detail: The central bank of…
A: The central bank being the apex bank of a common currency area can or cannot respond to a shock…
Q: What are the pros and cons of increasing the minimum wage
A: Employers who give higher wages to their employees are said to be paying efficiency wages. This…
Q: Using the table below, answer the following question: Real GDP ConsumptionPlanned (Y) GovernmentNet…
A:
Q: At equilibrium in the simple Keynesian model of income determination, which of the following…
A: The equilibrium level of national income is defined by the point where the aggregate demand curve…
Q: Let's say we have a function QA = 10 - 2PA + 4PB + 10INC Where QA is the quantity of good A PA is…
A: Given demand function QA = 10-2PA+4PB+10INC For given QA= 50, PA = 2, PB = 6 and INC = 2
Q: 18) A single commercial bank must meet a 25% reserve requirement. If it initially has no excess…
A: We have required reserve ratio = RRR = 0.25 and cash deposit = 2000
Q: COSI MC ATC AVC MR 15 14 11 750 1,100 1,350 1,800 Quantity Figure 12-5 shows cost and demand curves…
A: (a). The profit maximizing quantity produced by the firm is 1350 because at this level of quantity,…
Q: Carl is doing his homework and has the television on in the background. While it is on, several…
A: The correct option is c. It is representing the exposure stage of the information processing model.…
Q: Question 1 Suppose MPC and the tax rate are both equal to 0.2 for a closed economy. Assuming no…
A: Given tax rate = 20 % MPC = 0.2 MPS = 1 – MPC = 0.8
Q: An investment of 10,000,000 php has a revenue of x php that will increase of 10% every 2 years. With…
A: Initial Investment = 10,000,000 Annual Revenue = x Yearly interest rate = 8% 2 year revenue = 2x…
Q: Brand identity O Is the quantification of a product's sales price O Represents a set of values and a…
A: Brand identity is the noticeable components of a brand, such as a tone, plan, and logo, that…
Q: d.How will the firms adjust if the full employment level of income is 1500? Is this an inflationary…
A: A recessionary output gap is when the actual output is less than the potential output and an…
In this assignment, we’re assuming you’re a manager of different types of buffalo wing restaurants. I’ll give different scenarios- some will require math and others will require writing.
Cournot Oligopoly
2. Now, assume your buffalo wing firm is in a Cournot oligopoly with 3 additional firms. The market
Now find the profit-maximizing price for your firm if your marginal cost is $3.70.
Step by step
Solved in 3 steps
- Suppose a country's mobile phone industry is supplied by only two firms (i.e. an oligopoly). Explain how the presence of two firms affects the price elasticity of demand of each firm's output.Now, assume your buffalo wing firm is in a Cournot oligopoly with 3 additional firms. The market elasticity of demand for buffalo wings is -0.70. Find your firm’s elasticity of demand. Now find the profit-maximizing price for your firm if your marginal cost is $3.70.Two firms operate in a Cournot Duopoly with an inverse market demand function: P = 180 – 3Q, where Q = q1 + q2. Firm 1 has a total cost structure; TC1 = 50 + 2q1 + 2q1 2 and firm 2 had a total cost structure: TC2 = 100 + 3q2 + 3q2 2 . Answer the following questions: a. If both firms wish to compete, what is the optimal quantity for each firm (qi) and the market price? b. What are the profits for each firm from the strategy in part a? c. If both firms choose to collude and not directly compete, what is the new price, quantity, and profits for each firm?
- Two firms engage in Cournot competition in the Everlasting Gobstopper industry. The price elasticity of demand is -2. Firm 1 has a constant marginal cost of $365.00 per unit, and firm 2 has a constant marginal cost of $602.25 per unit. If the two firms are currently in equilibrium, what is firm 2's share of the market? Enter your answer as a decimal, rounded to two places if necessary.What are the distinguishing features of oligopoly? Why are breakfast cereals made by firms in oligopoly? Why isn't there monopolistic competition in that industry? Business Week reported that Energizer is gaining market share against competitor Duracell and its profit is raising despite the sharp rise in the price of zinc, a key battery ingredient. In what type of market are batteries sold?At a time when demand for ready-to-eat cereal was stagnant, a spokesperson for the cereal maker Kellogg's was quoted as saying, “. for the past several years, our individual company growth has come out of the other fellow's hide." Kellogg's has been producing cereal since 1906 and continues to implement strategies that make it a leader in the cereal industry. Suppose that when Kellogg's and its largest rival advertise, each company earns $0 billion in profits. When neither company advertises, each company earns profits of $10 billion. If one company advertises and the other does not, the company that advertises earns $52 billion and the company that does not advertise loses $2 billion. For what range of interest rates could these firms use trigger strategies to support the collusive level of advertising? Instruction: Enter your response as a percentage rounded to the nearest whole number. percent
- Suppose oil production in the Gulf of Mexico was a symmetric horizontal oligopoly in Cournot competition. Assume there are two producers, each with a constant marginal cost of production of $50 per barrel. Let the demand function for oil in the region be D(p) = 12000 – 20p, where demand is measured in barrels per day. (You will need to calculate inverse demand from demand before moving on). What would the perfectly competitive equilibrium price and quantity be? What would be the consumer surplus and producer surplus? Draw each firm’s residual inverse demand curve. Calculate the Cournot-Nash equilibrium price and quantity. What is the total consumer surplus, total producer surplus across the two firms, and deadweight loss?The following problem is a mixture of a Cournot/Bertrand duopoly Assume the following demand functions for a differentiated duopoly: P1 = 100 – 0.5Q1 – 0.4Q2 & P2 = 100 – 0.5Q2 – 0.4Q1. There are no costs. The first firm plays Cournot (selects Q) and the second firm plays Bertrand (selects P). Show the following:(i)Both are better off (in terms of profit) if they play Cournot(ii)If they play Bertrand, the first firm would have an incentive to shift to Cournot (or, the firm that plays Bertrand is worse off if the other firm plays Cournot and slightly better if both play Bertrand)The New York Times reports that Wal-Mart has decided to challenge Netflix and enter the online DVD-by-mail market. Because of economies of scale, Wal-Mart has a slight cost advantage relative to Netflix. Wal-Mart is considering the use of a limit pricing strategy. It can enter the market by matching Netflix on price. If it does, and Netflix maintains its price, then both firms would earn $5 million. But if Netflix drops its price in response, Wal-Mart would have to follow and would earn $2 million; Netflix would earn $3 million. Or Wal-Mart could enter the market with a price that is below Netflix's current price but above its marginal cost. If it does, Netflix would make one of two moves. It could reduce its price to below that of Wal-Mart. If it does, Wal-Mart will earn a profit of $0, and Netflix will earn a profit of $2 mil- lion. Or Netflix could keep its present price. If Netflix keeps its present price, Wal-Mart can keep its present price and earn $6 million (while Netflix earns…
- Two firms engage in Cournot competition in the Everlasting Gobstopper industry. The price elasticity of demand is-2. Firm 1 has aconstant marginal cost of $110.00 per unit, and firm 2 has a constant marginal cost of $181.50 per unit. If the two firms are currently inequilibrium, what is firm 2's share of the market? Enter your answer as a decimal, rounded to two places if necessary.______ Please show all stepsConsider the following figure familiar from the lecture on differentiated oligopoly. A D P2 F P2 -4 H P1 Valuation for Firm 1 (v1) Are the following statements true or false? 1. When prices are p, and p2, consumers in areas B, C, D, F, G, and I purchase from Firm 1. 2. When prices are p, and p,, consumers in area H do not buy from either Firm. 3. When prices are p, and p2, consumers on the boundary between areas B and Care indifferent between purchasing the product from Firm 1 or Firm 2. 4. Suppose Firm 1's price is fixed at p,. If Firm 2 changes its price from p, to p2 - 4, then consumers in areas E, F, and G will switch from buying from Firm 1 to buying from Firm 2. 5. Suppose there are no consumers in areas A and B, but there are consumers in all the other regions, and suppose that Firm 2's marginal cost is zero. Then p, cannot be profit maximizing for Firm 2. Valuation for (Za) z wWhich of the following best represents the pricing behavior of firms in an oligopolistic market? A) Stay*Put Clothespins takes the market price of clothespins as given and produces the amount of clothespins where marginal revenue equals marginal cost. B) Unykdrugs, Inc. produces where its marginal revenue is equal to its marginal cost and prices on its downward-sloping demand curve such that the market for its product clears, knowing it will not face competition due to patents it holds on its products. C) Teen Angle Hardware looks for a niche to sell its hardware products to teens but finds it difficult to earn anything more than normal profit due to other hardware stores also looking for niches. D) Looking Over Your Shoulder Handbag Co. chooses the price it charges by estimating what its rivals are most likely to do and then taking their responses into consideration.