Calculate competitive equilibrium quantity, Macroeconomics

Assignment Help:

Assume a competitive industry with two hospitals. The hospitals compete in price (such that P=MC), face the inverse demand curve =10 - Q , and have a constant marginal cost of $5.

a) What is the competitive equilibrium quantity? What is the consumer surplus?

b) Now assume that the two hospitals merge, and their marginal cost falls to $4. What is the new quantity provided? What is the price to consumers? What is the consumer surplus?

c) What is the amount of the transfer from consumers to producers when the hospitals merged?

d) What are the efficiency gains from the merger?

e) The government challenges the merger. Should the courts allow the merger to proceed if only consumer surplus matters? Why or why not?

f) Should the courts allow the merger to proceed if considering total welfare (i.e. consumer surplus + producer surplus)? Why or why not?

 


Related Discussions:- Calculate competitive equilibrium quantity

Draw game in two standard forms, Consider the following game [payoffs are i...

Consider the following game [payoffs are in the form: (Ann, Bob, Carol)]: a) List each player's actions and strategies. b) If Ann "buys" Carol's position in the game (i.

Define the labor market, Q. Define the Labor Market? A significant macr...

Q. Define the Labor Market? A significant macroeconomic variable is the total amount of labor which is used in a certain time period. Amount of labor and amount of capital are

Kind of goods also the mrs, Suppose the utility function is given by: u(x,y...

Suppose the utility function is given by: u(x,y) = 3x+4y. What kind of goods are X and Y and what is the MRS?

Inflation, Identify trends or other patterns in inflation within the Spanis...

Identify trends or other patterns in inflation within the Spanish economy over the last five years using quarterly data. You must include data to justify the trends described.

Calculate the total cost and minimum cost, Consider a hospital that produce...

Consider a hospital that produces output (Q) and has two production inputs, nurse-hours (N) and beds (B). the hospital faces input costs of W N = 15 and W B = 25. Assume the h

Process to calculate gross domestic product, process to calculate gross dom...

process to calculate gross domestic product We just include finished goods and services - which is, anything that is sold directly to consumer. Electric power sold to a steel m

Derive the complex amplitude of the double convex lens, Derive that the com...

Derive that the complex amplitude of the double convex lens shown in the image below with focal length 1/f = (n-1 ) (1/R 1 - 1/R 2 ). Hint: we derived an plano convex lens in cla

Intermediate macroeconomics, An economy's IS and LM curves are given by the...

An economy's IS and LM curves are given by the following equations: with Y indicating output (income), c indicating the marginal propensity to consume, I investment, G gove

Utility function that is consistent, Suppose that midterm grades determine ...

Suppose that midterm grades determine your nal course grade putting the Midterm 1 grade on the horizontal axis and the Midterm 2 grade on the vertical axis, draw indifference curve

Write Your Message!

Captcha
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