Reference no: EM13156460
The market for social games on Facebook is perfectly competitive. The demand curve for games published is given by Q=400-4P, where P is the price users pay per game. The marginal cost of producing each game is constant at $5. In addition, all published games advertise through postings on Facebook, which bother many non-gamers in Facebook. The marginal cost that social games impose on non-gamers in Facebook is given by MEC=0.25Q, but game publishers could not care less about bothering non-gamers.
(a) What is the equilibrium number of social games published?
(b) What would be socially optimal number of social games on Facebook?
(c) Suggest a policy the government can impose that would achieve the efficient number of social games on Facebook and raise revenue for the government. Be precise.
(d) Calculate the revenue the government would earn under the policy you suggested in (c).
Institutional Venture Partners, an investor in Web companies, raised several funds for Zynga Inc. With this fund, Zynga merged and acquired all social games in Facebook and became a monopolist. Assume everything else is the same.
(e) What is Zynga's profit-maximizing number of games to be published?
(f) What is the total amount of the externality at Zynga's profit-maximizing quantity?
(g) What is the socially optimal quantity of games to be published?
(h) Draw a graph of this situation. Label the profit-maximizing and efficient quantities.
|
Determining amount using accounting equation
: Donna Ahern is the owner and operator of Omega, a motivational consulting business. At the end of its accounting period, December 31, 2009, Omega has assets of $760,000 and liabilities of $240,000. Using the accounting equation and considering eac..
|
|
Probability all households in city monitored by tv industry
: What is the probability that all 6 of the households in her city being monitored by the TV industry would tune in to the new show?
|
|
What is the true molecular formula for nicotine
: An analysis of nicotine (MW=162 g/mol) gives 74.0% carbon, 8.65% hydrogen, and 17.3 nitrogen. What is the true Molecular formula for nicotine?
|
|
How much output should the firm allocate to market
: how much output should the firm allocate to market 1? Approximately how much output should the firm allocate to market 2? What is the approximate price that will be charged in market 1?
|
|
What is zyngas profit-maximizing number of games
: What is Zynga's profit-maximizing number of games to be published and what is the total amount of the externality at Zynga's profit-maximizing quantity?
|
|
Draw a graph that shows the variation of quantity of dna
: Draw a graph that shows the variation of quantity of DNA in the nucleus of the male germ cell at the time of multiplication and maturation and fertilization and the egg after fertilization.
|
|
How many pineapples will she consume
: how many pineapples will she consume? If her income increases to $120, how many grapefruits will she consume? Are grapefruits a normal or inferior good?
|
|
What is the ph of a solution
: For H3PO4, a tripotic acid, Ka1 = 7.1 × 10-3, Ka2 = 6.3 × 10-8, and Ka3 = 4.5 × 10-13. What is the pH of a solution which contains 0.200 mol of K2HPO4 and 0.300 mol of Na3PO4 per liter of solution?
|
|
Journal entry recording for the sale of old plotter
: Toth chose to upgrade to a premium model in January 2007 and sold the old plotter to dunn drafting for $2,500. Prepare the journal entry recording for this sale of old plotter.
|