The market price of laptops in a certain city is determined by P = 1,400 – Q where Q represents the total number of laptops produced. The total cost of producing q laptops is TC = 200q +50,000 for any firm in this market. (e) Suppose both firms are able to collude and equally split monopoly production. What is the profit for each firm

The market price of laptops in a certain city is determined by P = 1,400 – Q where Q represents the total number of laptops produced. The total cost of producing q laptops is TC = 200q +50,000 for any firm in this market. (e) Suppose both firms are able to collude and equally split monopoly production. What is the profit for each firm

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter9: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 11SQP

See similar textbooks

Similar questions

Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply (S = MC) curves in the market for hot dogs. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition. Competitive Market 5.0 4.5 PC Outcome 4.0 3.5 3.0 o 2.5 2.0 S=MC 1.5 1.0 0.5 D 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hot dogs) PRICE (Dollars per hot dog)
5. Monopoly outcome versus competition outcome Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply (S = MC) curves in the market for hot dogs. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition. Competitive Market 5.0 4.5 PC Outcome 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 PRICE (Dollars per hot dog) 0 30 60 S=MC 90 120 150 180 210 QUANTITY (Hot dogs) D 240 270 300
Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. This firm buys up all the rest of the hot dog vendors in the city and operates as a monopoly. Assume that this change doesn't affect demand and that the new monopoly's marginal cost curve corresponds exactly to the supply curve on the previous graph. Under this assumption, the following graph shows the demand (D), marginal revenue (MR), and marginal cost (MC) curves for the monopoly firm. Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity of a monopolist. Use the green points (triangle symbol) to shade the area that represents consumer surplus, and use the purple points (diamond symbol) to shade the area that represents producer surplus. PRICE (Dollars per hot dog) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 30 Monopoly MC D MR 90 120 150 180 210 240 270 300 QUANTITY (Hot dogs)…
Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. This firm buys up all the rest of the hot dog vendors in the city and operates as a monopoly. Assume that this change doesn't affect demand and that the new monopoly's marginal cost curve corresponds exactly to the supply curve on the previous graph. Under this assumption, the following graph shows the demand (D), marginal revenue (MR), and marginal cost (Mc) curves for the monopoly firm. Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity of a monopolist. Monopoly 5.0 4.5 Monopoly Outcome 4.0 3.5 3.0 2.5 MC 2.0 1.5 1.0 0.5 D MR 35 70 105 140 175 210 245 280 315 350 QUANTITY (Hot dogs) In the following table, enter the price and quantity that would arise in a perfectly competitive market; then enter the profit-maximizing price and quantity that would be chosen if a monopolist…
Firm P has a monopoly on producing printers, and Firm C has a monopoly on producing computers. Printers and computers are complements, and Q is the number of bundles, with one printer and one computer in each bundle. Pp is the price of a printer, and Pc is the price of a computer. The demand function is Q = 10 – Pp – Pc, and marginal cost is zero. he two firms will choose prices to maximize profits, but neither firm knows the price charged by the other firm. Calculate Q, Pp, Pc, and profits for each firm.
“No firm is completely sheltered from rivals; all firms compete for consumer dollars. If that is so, then pure monopoly does not exist.” Do you agree? Explain.
1) A monopoly faces a demand curve P(Q) = 120 – 2Q, and has a marginal cost of 60. a. What is profit-maximizing level of output? What is the profit-maximizing price? How much profit the firm will make? b. Assume that a second firm enters the market. The new firm has an identical cost function. If the two firms enter in a Cournot competition, what will be the price in equilibrium? How much will each firm produce in equilibrium? How much profit will each firm make? c. If, instead, the two firms compete in a Stackelberg game (assume the incumbent firm is the leader), what will be the price in equilibrium? How much each firm will produce in equilibrium? How much profit will each firm make? d. Now assume the follower has to pay a fixed cost, f =100 if q>0. Does it change the follower's decision? Assume again they are playing a Stackelberg game.? e. The leader knows that the follower has to pay the fixed cost and decides produce one third more than the quantity found in part c). Does it…
Q3. There are two firms selling differentiated products. Firm A faces the following demand for his product: e, = 20 – -P, + -P, 2. Firm B faces the following demand: 1 P. +-P, 2. 0, = 220- Assume that the marginal cost is zero both for firm A and firm B. What are the equilibrium prices of a simultaneous price competition? What would the equilibrium prices be if A is the leader and B is the follower?
Consider two firms 1 and 2. The cost function of each firm is TC(9) function is given by P(Q) compare it to the monopoly outcome and competitive outcome. 9(q) The inverse demand 40 - Q. where Q = 9, + 92. Find the Cournot Nash equilibrium and !! No upload is required for this question.
Only typed answer Two firms both produce leather boots. The inverse demand equation is given by P = 340 - 2Q, where P is the price of boots in USD/pair and Q is quantity of boots in million pair. The cost function is given by: C(Q) = 40Q. If the two firms are Stackelberg oligopolists), the output of the leader is equal to: 1) 60 2) 80 3) 75 4) 900
Intel is the world’s largest manufacture of semiconductor chips by revenue. During the 1990s, Intel became the dominant supplier of microprocessors for PCs and was known for aggressive and anti-competitive tactics in defense of its market position. Consider the market for Intel’s Pentium II processor, released in May 1997. Assume Pentium II enjoyed a monopoly in computer processors. Intel’s cost of production is characterized by function C = 10Q2, marginal cost MC = 20Q, while the market demand for the product is P = 400 − 10Q. Calculate Intel’s profit-maximizing quantity for its Pentium II processor. How much would Intel price its Pentium IIs?
Please