Reference no: EM131002312
Wolfe and Baker are the ONLY two firms producing door stopers because of such a small market in their area and both firms are profit maximizing. They have a marginal cost (MC) of $8 and have NO fixed cost (FC = $0). The demand for door stopers is given by function P = 32 - Q, where P is in dollars and Q is in thousands of door stopers. Because of only two producers for the market, the total quantity in the market is given Q = QM + Qn, where Qm is number of door stopers produced by Wolfe and Qn is the number of door stopers produced by Baker. BOTH Wolfe ad Baker choose what quantity to produce, so this market is a Cournot Duopoly.
A. When both firms set quantity, Wolfe's reaction funtion is (Nonexistent, Qm = 16 - 0.5Qn, Qm = 12 - 0.5Qn, Qm = 16 - 2Qn, Qm = 32 - Qn, Qm = 12 - 2Qn) and Baker's reaction function is (Nonexistent, Qn = 12 - 2Qm, Qn = 12 - 0.5Qm, Qn = 16 - 0.5Qm, Qn = 32 - Qm, Qn = 16 - 2Qn).
B. Plot On A Graph Wolfe and Baker's reaction curves. If they have no reaction curves say No reaction curve.
C. If Baker believes that Wolfe will produce a quantity of 16,000 door stopers, then Baker would produce (4,000, 8,000, 10,000, 12,000, 16,000) door stopers. If Wolfe produces 10,000 door stopers then Baker will produce (4,000, 8,000, 10,000, 12,000, 16,000).
D. On graph created above, mark the euilibrium of this market.
E. When Wolfe and Baker are Quantity Setters, the total equilibrium market quantity will be (8,000, 12,000, 16,000, 18,000, 24,000) door stopers and the equilibrium market price will be ($12, $14, $16, $20, $24). In equilibrium, Wolfe and Baker will each produce (4,000, 6,000, 8,000, 9,000, 12,000) door stopers and make a profit of ($36,000, $64,000, $72,000, $96,000, $120,000).
|
Develop a global? mindset
: Which of the following methods will NOT help managers develop a global? mindset?
|
|
What amount will jennings retained earnings
: By what amount will Jennings' retained earnings decline if it now sells the remaining 1 million treasury shares at $67 per share?
|
|
Demand for a softback managerial economics text
: Demand for a softback managerial economics text is given by Q=20,000-300P. The book is initially priced at $30. Compute the point price elasticity of demand at P= $30. If the objective is to increase total revenue, should the price be increased or de..
|
|
Determine the equivalent total present worth
: A plant superintendent has arranged to purchase an additive through a 6-year contract at $5,000 per year, starting 1 year from now. Afterwards, he expects the annual price to increase by 3% per year thereafter for the next 12 years. Additionally, an ..
|
|
Only two firms producing door stopers
: Wolfe and Baker are the ONLY two firms producing door stopers because of such a small market in their area and both firms are profit maximizing. They have a marginal cost (MC) of $8 and have NO fixed cost (FC = $0). On graph created above, mark the ..
|
|
Describe a different sdlc model
: This research paper will compare and contrast Systems Development Life Cycle (SDLC Models). The research paper must be submitted using Safe Assign. describe a different SDLC Model
|
|
Discuss errors in perception and selection that interviewers
: Untrained interviewers can make mistakes that are very costly to the organization." Discuss errors in perception and selection that interviewers can make and how to avoid them.
|
|
What is the impact this has had on chinas economy
: During the last decade, outsourcing often translated in offshoring of product buys. One popular location to buy product offshore was China. Why was China such a popular spot to buy labor intensive products? Why are many people leaving China and bring..
|
|
Consumer has monotone preferences over bundles of goods
: Consider a consumer who allocates her income m to the consumption of goods 1 and 2. Denote by pi the price of good i = 1, 2. The consumer’s preferences are such that there exists a bundle x = (x1, x2) such that for any bundle y = (y1, y2), y ƒ= x, we..
|