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Suppose that a market for homogeneous product has demand P=200-2Q. Each firm that operates in the industry has a constant marginal cost of production of 40, but also fixed cost of production 20 if any output is produced. The fixed cost of production is zero if output is zero however
a) Suppose that a monopolist operates in this industry. What is equilibrium price and output level? Does the monopolist make positive profit?
b) Suppose that the industry is composed of two (identical) Cournot duopolists. What is the equilibrium price and output for each firm make positive profits?
c) How would your answer to (b) change if the firm were Bentrand duopolists?
d)Now, suppose that the firm behave as Stackelberg competitors. What are the equilibrium price, output level, and profit levels of the firm? Compare the answer to your previous answers. What do you notice?
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Health plan guaranteeing that all qualified participants can purchase MRI tests at an effective price to the individual of $100 per test. How many MRI tests are now demanded? Is the result in the market a surplus or shortage?
This week covered validation and the use of validators. Describe at least two other techniques for validating your document that does not involve submitting it through an online validator.
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Is the cross-price elasticity of demand between gasoline and high-mileage subcompact cars positive or negative? Is the cross-price elasticity of demand between gasoline and low-mileage SUVs and full-size pickups positive or negative? Briefly expla..
Find an algebraic expression for the firm's average cost function, AC(y), and for its marginal cost function, MC(y)
A firm with the production function Q(K,L)=2 (K^(1/2))(L^(1/2))
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List the combinations of yogurt and berries that Jerry can afford. Draw a graph of his budget line with the quantity of berries plotted on the x -axis.
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