Should the monopoly buy the machine anyway

Assignment Help Econometrics
Reference no: EM131345094

A monopoly manufacturing plant currently uses many workers to pack its product into boxes. It can replace these workers with an expensive set of robotic arms. Although the robotic arms raise the monopoly's fixed cost substantially, they lower its marginal cost because it no longer has to hire as many workers. Buying the robotic arms raises its total cost: The monopoly can't sell enough boxes to make the machine pay for itself, given the market demand curve. Suppose the incumbent does not invest. If its rival does not enter, it earns $0 and the incumbent earns $900. If the rival enters, it earns $300 and the incumbent earns $400. Alternatively, the incumbent invests. If the rival does not enter, it earns $0 and the incumbent earns $500. If the rival enters, the rival loses $36 and the incumbent makes $132. Show the game tree. Should the monopoly buy the machine anyway?

Reference no: EM131345094

Questions Cloud

What would oil drilling companies want to do : Imagine a nation discovers a massive source of oil off of its shore that it never knew existed. Imagine that this oil discovery has made the country instantly rich. What would oil drilling companies want to do? What would the government want to do
The cost of flyer and its distribution would be considered : In addition, one segment of the flyer solicited contributions to the organization to help fund its activities. The cost of the flyer and its distribution would be considered.
Determine if the waveform is causal or noncausal : Find VMAX, VMIN, Vp, Vpp, Vavg, Vrms, and T0 for the periodic waveform in given Figure and determine if the waveform is causal or noncausal.
Graph the supply and demand for real money balances : Suppose that the money demand function is (M/P)d = 1000-100r where r is the interest rate in percent. The money supply M is 1000 and the price level P is 2. Graph the supply and demand for real money balances
Should the monopoly buy the machine anyway : If the rival does not enter, it earns $0 and the incumbent earns $500. If the rival enters, the rival loses $36 and the incumbent makes $132. Show the game tree. Should the monopoly buy the machine anyway?
Determine an expression for the waveform : Gated Function Some radars use a modulated pulse to determine range and target information. A gated modulated pulse is shown in given Figure. Determine an expression for the waveform.
Discuss about the strategic hrm proposal : Access the Scenario Generator. Create a scenario for Project 1: Strategic HRM Proposal. The characteristics of this scenario should differ from the characteristics in your Scenario Generator Report. Briefly compare and contrast these characterist..
Which country has a comparative advantage in producing fish : What is the opportunity cost of 1 unit of fish in Tuvalu? Show your work. Which country has a comparative advantage in producing fish? Explain why. Suppose that trade takes place between Kiribati and Tuvalu. Which good will Kiribati imports from Tuva..
What is the subgame perfect nash equilibrium : If the rival enters, the best the entrant can make is $0, the same amount it would earn if it didn't enter, but the incumbent earns only $400. Show the game tree. What is the subgame perfect Nash equilibrium?

Reviews

Write a Review

Econometrics Questions & Answers

  Which of the following statements about a tariff is true

A tariff increases consumer surplus, decreases producer surplus, increases revenue to the government, and increases total surplus.

  Equation for the monopolist''s marginal revenue funtion

A monopolist's inverse demand function is P = 150 - 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at facility 2 is MC2(Q2) = 2Q2. Provide the eq..

  What is the projects annual operating cash flow

Bygrave forecasts incremental annual sales revenue of $940,000. Similarly, Bygrave expects total variable costs to increase by $500,000, and total fixed costs to increase by $80,000. Bygrave's marginal tax rate is 39%.

  Find the total setup time to produce the quantity needed

A manufacturer wishes to produce 1,000 metal frames. A setup time of 5 hours is required at the beginning of each batch of 20 frames. Find the setup time per frame in HOURS. hours Find the total setup time to produce the quantity needed.

  How are comments designated in php code

What is an Integrated Development Environment (IDE), and how is it used?

  Consider an economy that produces only two goods fresh

consider an economy that produces only two goods fresh apricots and dried apricots. in this economy the technology of

  What is the price elasticity of demand for the firms product

where Q is the quantity demanded of its product, P is the price of its product, Pr is the price of its rival product, and I is per capita disposable income. At present, P=$10, Pr=$20, and I=$6000

  Which angle provides more contrast between the two tissue

Which angle provides more contrast between the two tissue types? Repeat at t = 500 ms and compare the contrast to the previous case.

  What is dealers annual rate of return on loan transactions

Assume that you are going to buy a car work $25,000. You will be able to make a down payment of $3,000. The remaining 22,000 will be financed by the dealer. The dealer computes your monthly payment to be $547.47 for 28 months of financing.

  What has been happening to the reported releases over time

What has been happening to the reported releases over time? These data are self-reported by the companies. Do you trust its accuracy? If you were concerned about the health risk posed by the toxic releases in your neighborhood, what would you do a..

  What generalization can be drawn from the completed table

Compute and enter in the spaces provided in the accompanying table either the interest rate that the bond would yield to a bond buyer at each of the bond prices listed or the bond price at each of the interest yields shown. What generalization can..

  Derive and plot olivia''s engel curve for pie

Derive and plot Olivia's Engel curve for pie if she eats pie only à la mode and does not eat either pie or ice cream alone (pie and ice cream are perfect complements).

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