AlphaMart sells groceries at the west end of Main Street, a street that is one kilometre long. AlphaMart competes with BetaMarket, which is located at the east end of the street. AlphaMart and BetaMarket sell groceries that are identical in every respect, apart from the locations of the two stores. The marginal cost of an item of groceries is $3 to both retailers. Main Street is home to 200 consumers; the consumers are evenly spaced along the street. Each consumer demands one item of groceries, and faces a travel cost of $12 per kilometre. What are the best response functions of the two firms? Hint: Keen a record of your answer for use in l
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- Alpha Gear is a fitness apparel company. One of their best selling products are their joggers. The company sells joggers under a block pricing scheme that charges $13 per pair of joggers if the customer buys up to 10 joggers and $8 if they buy 11 to 20 joggers. The demand curve is Q-1400 - 25P, and the marginal cost of making a pair of joggers is $5. What are the profits for Alpha Gear under this pricing scheme? 8975 8600 3600 12200 000The following graph depicts the costs incurred by a Local egg seller, Rahim. Rahim is faced with strong competitors who are selling exactly the same product. Use the graph to answer the following questions- Price/Cost per egg MC 12 ATC 8 MR3 AVC 6. MR2 MR1 Quantity 100 200 300 400 a)At what price will Rahim try to minimize loss by selling eggs in the market? b)At what price will there be a break-even point?country where wine is difficult to grow. The demand for wine is given by p = $480 - .2Q, where p is the price and Q is the total quantity sold. The industry consists of just the two Cournot duopolists, Grinch and Grubb. Imports are prohibited. Grinch has constant marginal costs of $6 and Grubb has marginal costs of $45. How much Grinch's output in equilibrium? | a) 1,350 b) 2,025 c) 337.50 d) 675 e) 1,012.50
- 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.The following table presents the valuations that 5 different consumers have for 2 different products. The production costs are $10 per unit of good A and $10 per unit of good B. The firm producing them can choose to price them independently or using a bundling strategy. What is the profit the firm will realize, if it prices optimally? VALUATIONS Product A Product B Consumer 1 5 95 Consumer 2 10 90 Consumer 3 50 50 Consumer 4 80 20 Consumer 5 95 5 ANSWER SHOULD BE 410. I will like if it is right! showing my support. Thank you.Refer to the table below to answer the following questions. Table 14.2.10 Fim A Comply A: Sim Cheat A $1 Sm Comply B Sim B-S05m Firm B A:-50.5m A0 Cheat B $15m B:0 Refer to Table 14.2.10. Firm A and Firm B are the only producers of soap powder. They collude and agree to share the market equally. The equilibrium a dominant strategy equilibrium because the strategy in this game is for a firm Select one O A is to comply regardless of the other firm's choice O B.is to comply when the other firm cheats and to cheat when the other firm complies O Cis not to comply when the other firm complies and to cheat when the other firm cheats OD. is to cheat regardless of the other firm's choice OEis not to comply when the other firm cheats and to cheat when the other firm complies 219 PM
- Why does Pinterest see Google as its biggest competitor? Why does Pinterest prioritize the smartphone platform while developing new features and products?Suppose Tasty Cakes is deciding its pricing strategy: it is debating whether to offer a single linear price for its sheet cakes or to offer non-linear pricing. Suppose on any day, it gets 2 customers–who are of Type A and TypeB with the following maximum willingness-to-pay for the cakes: Units Type A Type B 1 $100 $90 2 $75 $40 Suppose it costs $10 to bake each of the cakes. (a) If Tasty Cakes decides to pick a linear pricing strategy, what will be the profit-maximizing price it should choose? How many cakes will it end up selling and what will be its total profit? (b) If Tasty Cakes decides to pick a non-linear pricing strategy where it may offer a different price depending on the number of cakes purchased, what should be the profit-maximizing set of prices? How many cakes will it sell and what will be its total profit? (c)Comparing Tasty Cakes’profits in (a) and (b), explain IN WORDS why we see this difference in profitsThe Old Familiar and The Beehive are the only two bistros in town. Each is trying to decide whether or not it should advertise in the local newspaper. The accompanying payoff table gives their weekly profits under each possible outcome. The Beehive The Beehive does advertise | does not advertise The Old Familiar The Old Familiar earns $X in profits. earns $3,500 in profits. The Old Familiar does advertise The Beehive The Beehive earns $Y in profits. earns $2,250 in profits. The Old Familiar The Old Familiar earns $2,000 in profits. earns $2,500 in profits. The Old Familiar does not advertise The Beehive The Beehive earns $4,000 in profits. earns $3,500 in profits. a. Which combination or combinations of X and Y would make a situation in which The Old Familiar does not advertise and The Beehive advertises a Nash equilibrium? A Nash equilibrium occurs if
- The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let’s work through the decision at the level of one color of golf shirts sold per outlet store per day. The decision being made is how low a price to select at the start of any given day to generate sales at that price throughout the day. The demand, revenue, and variable cost information is collected on the following spreadsheet:Questions1. Identify the change in total revenue (the marginal revenue) from the fourth shirt per day. What price reduction was necessary to sell four rather than three shirts?2. Does this fourth shirt earn an operating profit or impose an operating loss? How large is it?3. What is the change in total revenue from lowering the price to sell seven rather than six shirts in each color each day? In what sense is the decision to sell this seventh shirt…2. The market for dark chocolate us characterized by Cournot duopolists - Honeydukes and Wonka industries. The market demand for dark chocolate is:P = 8 - 0.005Qdwhere P is the price per bar in dollars and Qd is dark chocolate's daily quantity demanded in bars (use qh to represent the quantity of dark chocolate sold by Honeydukes and qw to represent the quantity of dark chocolate sold by Wonka Industries). Honeydukes has a constant marginal cost of $2.50 per bar, while Wonka Industries has a constant marginal cost of $3.00 per bar. The firms move simultaneously in choosing their profit-maximizing quantity of output.a. Given the firms move simultaneously, what is the equation for Honeydukes' reaction function with qh expressed as a function of qw?b. Given the firms move simultaneously, what is the equation for Wonka's reaction function with qw expressed as a function of qh?c. What quantity of dark chocolate will each firm produce in equilibrium and what price will be established for a…Imagine a small town in a remote area where only two residents, Maria and Miguel, own dairies that produce milk that is safe to drink. Each week Maria and Miguel work together to decide how many gallons of milk to produce. They bring milk to town and sell it at whatever price the market will bear. To keep things simple, suppose that Maria and Miguel can produce as much milk as they want without cost so that the marginal cost is zero. The weekly town demand schedule and total revenue schedule for milk is shown in the table below: Quantity (in gallons) 10 |1 O b. $12 O c. $10 d. S8 2 113 14 לן 16 17 18 19 10 11 12 Price $24 $22 $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 Total Revenue (and Total Profit) $0 $22 $40 $54 $64 $70 $72 $70 $64 $54 $40 $22 $0 Refer to Table 17-3. Suppose the town enacts new antitrust laws that prohibit Maria and Miguel from operating as a monopoly. What will be the price of milk once Maria and Miguel reach a Nash equilibrium? a. $14