Reference no: EM131240775
Let market demand in the trinkets industry be given by Q(P) = 55−P. There are only two firms in the industry, and the total cost function for each firm be given by C(qi) = 10 + 25q, where i = 1, 2.
1. Find each firm’s Cournot-Nash equilibrium output, profit, and the resulting equilibrium price in the market.
2. What is consumer surplus in equilibrium? How does it compare with consumer surplus under perfect competition?
3. Calculate the total surplus in this Cournot-Nash equilibrium. Is the equilibrium outcome Pareto efficient? If not, calculate the Dead-Weight-Loss (DWL) in this market.
4.Suppose that, observing profits made by incumbent firms, 6 new firms, identical to the first two, enter the market as Cournot competitors. How do equilibrium prices, quantities, and profits change? (Note: now there are 8 identical firms competing in the market for trinkets).
5. Are consumers better off? In other words, does their consumer surplus rise, fall, or stay the same? Explain your answer.
6. A ninth and identical firm is thinking about entering the market too. Explain why it will, upon further reflection, decide not to do so.
|
Formation of oil and natural gas
: What is the difference in the source material for the formation of coal as opposed to the formation of oil and natural gas?
|
|
How you would orient the new employee and introduce him
: Prepare 4-5 page paper describing how you would orient the new employee and introduce him/her to your organization's culture. Consider probation periods and the initial reviews necessary to ensure that the new hire is successful.
|
|
How ferguson and son manufacturing companys budgetary system
: Explain how Ferguson & Son Manufacturing Company's budgetary control system could be revised to improve its effectiveness. Explain how the use of an activity-based costing system could change the results of the budget, if utilized.
|
|
Maximum limit what is the upper limit of output power
: The efficiency increases linearly up to 97% with 200w output (I.e efficiency is 96% at 150w and so on ) similarly the efficiency decreases to 94% at 50w output the converter will be damaged whenever the power dissipated inside it exceeds 6w if the..
|
|
Compare with consumer surplus under perfect competition
: Let market demand in the trinkets industry be given by Q(P) = 55−P. There are only two firms in the industry, and the total cost function for each firm be given by C(qi) = 10 + 25q, where i = 1, 2. Find each firm’s Cournot-Nash equilibrium output, pr..
|
|
Which demand curve is relatively more elastic
: The graph shown above illustrates the demand curves for two goods: Sun hats and beach balls. Which demand curve is relatively more elastic?
|
|
What was disposable income
: Assignment: Measuring the Economy's Performance. What was disposable income (DI) for 2009? What does disposable income consist of? How did DI change from 2008? What caused these changes
|
|
Dangerous for a bus to carry standing passengers
: 1. Explain why it is dangerous for a bus to carry standing passengers. 2. Sea water of density 1.04g/cm3 is being pumped into a tank through a pipe of uniform. cross-sectional area of 3.142cm2. If the speed of water in the pipe is 5m/s, determine the..
|
|
Elasticity is the same as the slope of the demand curve
: Income elasticity of demand is always expressed as a positive number (absolute value).
|