User Account

All Pages

Calculate firms production levels and profits

Assignment Help Microeconomics
Reference no: EM131167317

Assume market demand is given by P=a-Q. Suppose there are two firms (1 and 2) that engage in Cournot competition. Firm 1's marginal cost of production is 1 while firm 2's marginal cost of production is c.

a. Calculate firms' production levels and profits.

b. Calculate the Herfindahl index of market concentration when market shares are measured as production shares. The Herfindahl index is a function of c. When is the Herfindahl index increasing in c? Decreasing in c?

c. Suppose a=14 and c=3. For what discount factors can collusion be sustained in which q1 = 4 and q2 =2?

Reference no: EM131167317

Questions Cloud

How much are consumer surplus and producer surplus : A monopolist faces the following demand curve: P = 100 - 3Q, its total cost is given by: TC = 100 + Q2 and its marginal cost is given by: MC = 2Q. If it is a single price monopolist, what is its profit maximizing price and quantity? Show your work. H..
What price will firm set : Consider the following two-stage game. At time 1, an incumbent firm (Firm 1) chooses its price (p1). Take p1 as given. Conditional on entering, what price will firm 2 set? For what values of p1 will Firm 2 enter
Long-run equilibrium output level of representative firm : All firms in a competitive industry have long-run total cost curves given by LTC(Q) = Q3 – 10Q2 + 36Q where Q is the firm’s level of output. What will be the industry’s long-run equilibrium price? What will be the long-run equilibrium output level of..
What are the total profits for the two periods : Take your answer to (a) as the amount produced in period 1 and solve for the production level in period 2 that maximizes period 2 profits. What are the total profits for the two periods
Calculate firms production levels and profits : Assume market demand is given by P=a-Q. Suppose there are two firms (1 and 2) that engage in Cournot competition. Firm 1's marginal cost of production is 1 while firm 2's marginal cost of production is c. Calculate firms' production levels and prof..
Develop a decision tree to solve changs problem : Develop a decision tree that can be used to solve Chang's problem.- How much would Chang benefit if she knew for certain that the Olympic organization would guarantee her the contract?
Identify the weaknesses or gaps found in the literature : Discuss which studies were stronger. Identify the weaknesses or gaps found in the literature. Discuss the academic and practical significance of prior research.
How much total profit is the firm making : In a competitive industry, the market-determined price is $3. A firm in this market is producing 36,000 units of output, and, at this output level, the firm’s average total cost reaches its minimum value of $3. How much total profit is the firm makin..
What items can be deleted to improve reliability : What item/s can be deleted to improve reliability - What items should never be deleted to maintain reliability of data?

Reviews

Write a Review

Microeconomics Questions & Answers

  Is this a demand issue or supply issue

Why does rent control result in a shortage of rental units and any time there is a shortage of a good it means that the price is too low. Analyze this statement.

  Explanatory power of the regression model

Evaluate the overall explanatory power of the regression model. Use a 0 . 05 level of significance. State all your hypotheses and explain your results. Do not use rules of thumb.

  What were economic profits

Ralph's Travel Agency had accounting profits of $50,000 and implicit costs of $30,000. What were economic profits?

  Probability distributions are often used in modeling risk

Normal 0 false false false EN-US X-NONE X-NONE Probability distributions a..

  Determining deadweight loss

A small town is served by many competing supermarkets, which have constant marginal cost. Using the diagram of market for groceries, show the consumer surplus, producer surplus, and total surplus.

  The demand for car washes in collegetown falls

Suppose the demand for car washes in Collegetown falls as a result of a cutback in college enrollment. Show graphically how the price and output for the market and for a single firm will be affected in the short run and in the long run.

  What restriction on the ai is needed for wa

W(sub)a= 1/a1(Y1)+1/a2(Y2)+1/a3(Y3)+1/a4(Y4) where a(i) are the constants. a) What restriction on the ai is needed for Wa to be an unbiased estimator of mu? b) Find the variance of Wa.

  Economics-decision making in multi-national firms

Can you articulate how macroeconomics and microeconomics come into play in the context of firm decision-making in a global business. Please provide an example.

  Explain the meanings of stability and the complexity

Explain the meanings of stability and the complexity of environmental changes

  Draw a supply and demand graph

Identify the impact of the policy on demand or supply of the good(s) or service(s). Discuss the change(s) and draw a supply and demand graph

  Determine the opportunity cost of attending the concert

If you receive a free ticket to a concert, what, if anything, is your opportunity cost of attending the concert How does your opportunity cost change if miserable weather on the night of the concert requires you to leave much earlier for the conce..

  Modified to produce a 5% ripple voltage

Explain how the circuit could be modified to produce a 5% ripple voltage.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd