How the monopolist problem changes compared to a situation

Assignment Help Microeconomics

Reference no: EM133341773

Question 1: Consider a monopolist that produces for two periods. The demand curves in both periods are q t= 1 - pt for t = 1, 2. The marginal costs are c in the first and c- 7q' in the second period. Here, 1 is a small and positive number. There is a discount factor of a between the periods.

1. Explain briefly how the monopolist's problem changes compared to a situation where the marginal cost is c in both periods.

2. Find the quantities q' and q that the monopolist chooses in the two periods. Hint: Start by solving the monopolist's problem in the second period and then continue to the first period.

3. Evaluate the effect of ) and discuss your result.

Question 2: In the recent financial crisis, rating agencies have become a focus of attention. The market has traditionally been dominated by a few big agencies, currently Standard & Poor, Moody's and Fitch. In 2006, the Securities and Exchange Commission (SEC) introduced measures to speed up the approval process for rating agencies with the aim to increase competition. However, in response to the financial crisis, the Fed introduced lending programmes for which this is what it said initially it accepts only collateral that has been appraised by one of the big three. Discuss the likely consequences of such a decision on market structure

Reference no: EM133341773

Questions Cloud

Key project elements-describe three health care settings : Describe three health care settings that you explored (Acute care clinic, Family Practice, Acute care rehabilitation center) proposed sites for EBP QI project.

What is the nash equilibrium : What is the Nash equilibrium? If the two distillers agree to coordinate their strategies (collude), what is the outcome?

How does this relate to coopa : One top we brought up with issue of free speech versus a protection of children online explain where you stand in this scenario, how does this relate to COOPA

Analyze the connection between the issue of use of force : Analyze the connection between the issue of use of force and what criminological theory contributed to the understanding-or misunderstanding-of these issues

How the monopolist problem changes compared to a situation : Explain briefly how the monopolist's problem changes compared to a situation where the marginal cost is c in both periods.

Two regulatory bodies and california nurse practice act : Identify at least two regulatory bodies and California's nurse practice act, specify certification, licensure requirements or scope of practice for specialty.

Write a short paper proposing a strategy to minimize : Propose at least one evidence-based practice to minimize the negative impact this issue may have on public perception of the criminal justice field

Determine the fixed cost total variable cost and total fixed : A firm produces 2000 units of a product at a total cost of 100000 RMB and 3000 units of the product at a total cost of 120000 RMB. Determine the fixed cost

Role of therapeutic relationship in narrative therapy : Describe key features and concepts of solution-focused brief therapy. Discuss the role of the therapeutic relationship in narrative therapy?

User Account

All Pages