Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
You are the oil minister of one of 5 key OPEC countries. The world demand for oil can be reduced to Q = 100 – p and therefore p = 100 – Q (where p is dollars and Q is in millions of barrels/day). The TC of production for you and all your OPEC brethren is 10q. Assume that each of the OPEC countries has plenty of oil so each can sell as much as it wants.
a. Given that there are 5 identical countries, each with a TC(q) = 10q, derive the aggregate profit maximizing quantity for the cartel (e.g. the total production from all 5 countries that would maximize the sum of all your profits).
b. Assume that each of the 5 firms gets a production quota equal to 1/5 the total supply you derived in part a. Further assume that each of the other countries is true to the agreement and produces at their quota. Derive the Residual Demand for your country. (this would be the demand left over after all the production from all the other countries is accounted for).
c. You are considering cheating on the rest of the cartel, what would your optimal production quantity be – assuming everyone else sticks to the agreement and therefore your residual demand looks like the answer to part b. This is your Best Response.
c. In a graph, show the response functions of firm 1 and firm 2 and identify the Cournot equilibria. One axis of the graph should be the output of firm 1 and the other axis the output of firm 2.
This document contains various important questions and their appropriate answers in the subject field of Economics.
Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..
Explain each of the following using supply and demand diagrams, With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.
The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.
Draw the production possibility curve and a. Define consumer surplus and producer surplus.
The Australian government administers two programs that affect the market for cigarettes
How many tickets to sell to maximize total welfare.
The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled
Depict the von Neumann-Morgenstern utility index u in a diagram
What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution
Calculate gross national product and net national product
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd