consider Atlanta as an oligopoly market with five airlines that behave in a Cournot Model fashion. The Atlanta market demand schedule is: P = 400 - .5*Q. The Cost schedule for Delta is: MC=AC=Scomp=100. The Cost schedule for the other four firms (United, Southwest, et al) is: MC=AC=Scomp=60. In the previous scenario Delta’s market share was 20% since all five firms were identical. What is Delta’s new market share?

consider Atlanta as an oligopoly market with five airlines that behave in a Cournot Model fashion. The Atlanta market demand schedule is: P = 400 - .5*Q. The Cost schedule for Delta is: MC=AC=Scomp=100. The Cost schedule for the other four firms (United, Southwest, et al) is: MC=AC=Scomp=60. In the previous scenario Delta’s market share was 20% since all five firms were identical. What is Delta’s new market share?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter10: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 11SQP

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Again consider Atlanta as an oligopoly market with five airlines that behave in a Cournot Model fashion. The Atlanta market demand schedule is:P = 400 - .5*Q.The Cost schedule for Delta is:MC=AC=Scomp=100.The Cost schedule for the other four firms (United, Southwest, et al) is:MC=AC=Scomp=60.In the previous scenario Delta’s market share was 20% since all five firms were identical. What is Delta’s new market share?
V9 Again consider Atlanta as an oligopoly market with five airlines that behave in a Cournot Model fashion. The Atlanta market demand schedule is P = 400 - .5*Q. The Cost schedule for Delta is: MC=AC=Scomp=100. The Cost schedule for the other four firms (United, Southwest, et al) is MC=AC=Scomp=60. In the previous scenario, Delta’s market share was 20% since all five firms were identical. What is Delta’s new market share?
Ugly Dolls Inc. (UD) is a firm in Mytown that sells its products on a market under monopolistic competition. The cost function of UD is represented by TC = 100+10Q. Lately, because of the UD is making a big amount of profit, some firms enter the market to compete. Assume that Mytown engages in free trade in the dolls markets with Yourtown, who also faces a market with monopolistic competition. Because of this we can expect that, (a) The numbers of firms operating in this market will not change. (b) At equilibrium the profit of firms will increase. (c) The quantity of types of dolls available to consumers will increase. (d) All the above answers are correct.
Consider a Cournot Oligopoly. One firm has costs C1(Q1) = 12Q1 while the other firm’s cost function is C2(Q2) = 10Q2. The demand for both firms’ products Q=Q1 +Q2 isQD(P)=200−2P. (a) Determine the equilibrium price P, the market shares s1, s2, and the quantities Q1, Q2 produced by both firms. (b) Suppose more firms with the lower cost technology, i.e., with cost function Ci(Qi) = 10Qi enter the market. How many firms with this technology must be in the market such that firm 1’s profit becomes negative. In other words, suppose there is one firm with the high costs, and n firms with the low costs. At what level n will profits of the high-cost firm be negative?
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?
Three firms, A, B and C engage in Bertrand price competition in a market with inverse demand given by P = 123 − 2Q. Whenever a firm undercuts the rivals’ price, it gets the entire demand. If firms charge the same lowest price in the market, they share the market. If a firm charges a price more than any rival, it has zero market share. Suppose there are no fixed costs, and the marginal costs of the firms are: c(A) = 91, c(B) = 83 and c(C) = 43. Find a Nash equilibrium of this game. What are each firm’s prices and profits? Explain solution. Suppose firm B leaves the market. Draw each firm’s best response on a diagram and find a Nash equilibrium of this duopoly game. Suppose the above game in part 2 between firms A and C was the stage game of an infinitely repeated game. Would it be possible for the two firms to collude or form a cartel in this case?
Three firms, A, B and C engage in Bertrand price competition in a market with inverse demand given by P = 123 − 2Q. Whenever a firm undercuts the rivals’ price, it gets the entire demand. If firms charge the same lowest price in the market, they share the market. If a firm charges a price more than any rival, it has zero market share. Suppose there are no fixed costs, and the marginal costs of the firms are: c(A) = 91, c(B) = 83 and c(C) = 43. a. Find a Nash equilibrium of this game. What are each firm’s prices and profits? Explain your solution. b. Suppose firm B leaves the market. Draw each firm’s best response on a diagram and find a Nash equilibrium of this duopoly game. c. Suppose the above game in part b between firms A and C was the stage game of an infinitely repeated game. Would it be possible for the two firms to collude or form a cartel in this case? "Economic "
Three firms, A, B and C engage in Bertrand price competition in a market with inverse demand given by P = 123 − 2Q. Whenever a firm undercuts the rivals’ price, it gets the entire demand. If firms charge the same lowest price in the market, they share the market. If a firm charges a price more than any rival, it has zero market share. Suppose there are no fixed costs, and the marginal costs of the firms are: c(A) = 91, c(B) = 83 and c(C) = 43. a. Find a Nash equilibrium of this game. What are each firm’s prices and profits? Explain your solution. b. Suppose firm B leaves the market. Draw each firm’s best response on a diagram and find a Nash equilibrium of this duopoly game. c. Suppose the above game in part b between firms A and C was the stage game of an infinitely repeated game. Would it be possible for the two firms to collude or form a cartel in this case?.
Please solve it quickly you can upload handwritten answer also. Consider Atlanta as an oligopoly market with five airlines that behave in a Cournot Model fashion. The Atlanta market demand schedule is: P = 390 - .5*Q. The Cost schedule for Delta is: MC=AC=Scomp=80. The Cost schedule for the other four firms (United, Southwest, et al) is: MC=AC=Scomp=40. What is Delta’s new market share?
Suppose that Raleigh and Dawes are the only sellers of bicycles in the UK. The inverse market demand function for bicycles is ?(?)=200−2?. Both firms have the same total cost function: ??(?)=12? and the same marginal cost: ??(?)=12.Suppose this market is a Stackelberg oligopoly and Raleigh is the first mover.a) Write down a formula for the reaction function of Dawes.b) Calculate the equilibrium quantity that each firm produces and the equilibrium price in the market.c) At the Stackelberg equilibrium, how much profit does each firm make?Suppose now that the two firms decide to act like a single monopolist.a) What will the total quantity of bicycles sold in the market be and what will the equilibrium price be? Represent the profit maximisation problem on a graph and indicate the price and quantity at the equilibrium.b) Calculate the total profit made by the two firms when they act like a monopoly. Compare it with the total profit they were making in the Stackelberg oligopoly.c) For the…
Consider a market that is a Bertrand oligopoly with 5 firms in the market. Each of these firms produce an identical product and each have the same cost function of C(Q) = 80Q. The inverse market demand for this product is P = 2480 – 2Q. What is the equilibrium market price?
Now suppose United Air Lines enters the Atlanta market. Consider this to be an oligopoly market with two firms that behave in a Cournot Model fashion. The market demand schedule is cost schedule for both firms are: P = 400 - .5*Q, and firm level cost for both firms is MC=AC=Scomp=100. What is the Cournot Market Price? Fill in the blank below with your answer. Your answer should be entered as a whole number such as 102. If you get 102.56, do not round or enter any decimal places, just enter 102 and nothing else for the answer.