Incentive to independently price at the monopoly level

Assignment Help Business Economics

Reference no: EM131086074

In a six-firm market, if all firms charge the monopoly price, the profit equals $120,000. In that same six-firm market, if all firms instead charge the prevailing price, the profit is $60,000. If the pricing period is one-month long, what is the maximum monthly discount rate implied for each firm to still have an incentive to independently price at the monopoly level?

Reference no: EM131086074

Questions Cloud

Examine the demand for videocassette recorders : Let's examine the demand for videocassette recorders (VCRs), which can be affected by their own price as well as the income of consumers and the price of a competing good, the DVD player.

Which process is now economically efficient-alpha or beta : Process alpha / process beta labour 625/ 250 capital ... Question process alpha / process beta labour 625/ 250 capital 45/125 A firm plans to produce 500 units per day of good Z. The firm’s production engineer finds two technically efficient processe..

Indifference curve involving two goods identifies : An indifference curve involving two goods identifies the:

Computer memory device : Jersey Imports, Inc., markets electronic devices imported from Thai producers. The company recently introduced an innovative and enormously successful 5 GB Joystick (computer memory device), but a flood of competitor entry and downward pressure on bo..

Incentive to independently price at the monopoly level : In a six-firm market, if all firms charge the monopoly price, the profit equals $120,000. In that same six-firm market, if all firms instead charge the prevailing price, the profit is $60,000. If the pricing period is one-month long, what is the maxi..

Describe strategies to overcome the identified barriers : Explain the key concepts that must be shared with the patient and family to achieve optimal disorder management and outcomes. Identify key interdisciplinary team personnel needed and how this team will provide care to achieve optimal disorder manage..

Fuzzy glow derived from consumption of goods : utility refers to the satisfaction or fuzzy glow derived from consumption of goods. utility and usefulness are synonymous (i.e., they have equivalent meanings). a good may yield utility when acquired but not be functionally useful.

Considering two business opportunities : Dr. Doug is considering two business opportunities. Both require an initial investment of $200,000. The first will return $50,000 at the end of each of the next six years, while the second will return $35,000 at the end of each of the next 10 years. ..

Annual total cost and marginal cost : Regulation Costs. Kingston Components, Inc., produces electronic components for cable TV systems. Given vigorous import competition, prices are stable at $4,500 per unit in this dynamic and very competitive market. Kingston's annual total cost (TC) a..

User Account

All Pages