Find economical efficient price and quantity of bottled wine

Assignment Help Microeconomics
Reference no: EM132299020

Question: Please answer all three parts of this one question and show all work in detail.

Amy and Soma discover a stream that áows wine. Amy and Soma decide to bottle the wine and sell it. The marginal cost and the Öxed cost to bottle wine are $2 and 0 respectively. The market demand for bottled wine is given by: P = 602 2Q; where Q is the total quantity of bottled wine produced and P is the market price of bottled wine.

(a) What are the economically efficient (in other words, perfectly competitive) price and quantity of bottled wine and how much will be the profit?

(b) Suppose that Amy and Soma act as Cournot duopolists. How much bottled wine will each one of them produce? At what price? How much profitt will each one of them earn?

(c) Suppose Soma is a "naive" Cournot duopolist so that Amy can act as a Stackelberg leader. What level of output will each one of them produce? What will be the price of wine? How much will be the proÖt for each one of them?

Reference no: EM132299020

Questions Cloud

Global comparative management : In global comparative management, Describe the role and importance of listening skills in cross-cultural communication.
What order should leaders initiate the change process : Assemble a change team, design and manage change experiments, clarify disconfirming data, reinforce results with a new vision
Examine two of the objectives for using an sla : Examine two of the objectives for using an SLA. Propose to the customer why it is important to include them in the contract.
Design and implementation of your demonstration system : ICT705 - Data and System Integration - University of the Sunshine Coast - create an input form that accepts user input for a particular service
Find economical efficient price and quantity of bottled wine : What are the economically efficient (in other words, perfectly competitive) price and quantity of bottled wine and how much will be the profit?
Debate the process of benchmarking : Debate the process of benchmarking. Giving a minimum of three reasons, persuade the CEO of an organization that benchmarking is important.
Describe the problems united airlines : Describe the problems United Airlines is having that can be solved or minimized with techniques and ideas that relate to organizational behavior.
How did the people and global community help : Each individual is required to complete an economic development analysis paper. This paper is to be a minimum of 12 pages (times new roman, font size 12).
Prepare a flexible budget performance report for the school : Critique a Report; Prepare a Performance Report - Prepare a flexible budget performance report for the school for July

Reviews

Write a Review

Microeconomics Questions & Answers

  What are the equilibrium price and quantity

Does the typical microchip firm display increasing, constant, or decreasing returns to scale? What would you expect about the real microchip industry? In general, what must be true about the underlying technology of production for competition to b..

  Why can not all balance of payments accounts be in surplus

Why can't all the balance of payments accounts be in surplus? What factors decide the demand for British pounds in foreign exchange markets? How are exchange rates determined under a flexible exchange rate system?

  Determine the effects on aggregate output

Determine the effects on aggregate output, consumption, employment, and the real wage, with reference to income and substitution effects.

  Do you need more information

Is the following, true, false, or do you need more information? Airlines should charge $1,300 for a first class ticket

  Embodies the tenets of the sustainable business

Compare and contrast a company of your choice that embodies the tenets of the sustainable business along with one that embodies that of the traditional model.

  Explaining the empirical link between education and earnings

Outline the human capital and signalling approaches to explaining the empirical link between education and earnings

  Globalization to explain how globalization has evolved

Define globalization. Briefly outline the history of globalization to explain how globalization has evolved.

  Determine the amount in the fund immediately

Five annual deposits in the amounts of ($1,200, $1,000, $800, $600, and $400) are made into a fund that pays interest at a rate of 9% compounded annually.

  A secret from the general public.

Private: - Private means to keep something a secret from the general public. Thus, under private network no third party interrupts this communication or receives any data that is exchanged between them.

  Determine the sensitivity of rate of return to useful life

A newspaper is considering buying locked vending machines to replace open newspaper racks in the downtown area. The vending machines cost $45 each.

  1 in a year weather can inflict storm damage to a home from

1. in a year weather can inflict storm damage to a home. from year to year the damage is random. let y be the dollar

  Draw jordans new budget constraint

How many total trips can Jordan take if she takes the train three times? Suppose Jordan's travel budget is cut to $360. Draw her new budget constraint.

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!

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