Calculate the monopoly profits and probability , Basic Statistics

Assignment Help:

Each firm in a competitive research industry can undertake one project at a constant cost, f = $960 to try and develop a certain new product. The inverse demand curve for the new product is expected to be p = 100 - 2Q, and its marginal cost of production is expected to equal $20 (with no fixed production costs).

2096_p.png

 The interest rate r is 5%. The probability ρ(n) that at least one of n firms will succeed is given by the following table:

Using these rounded figures rather than the values of the function they approximate, and using ρ (n+1) - ρ (n) as an approximation for ρ'(n), calculate,

(a) The socially optimal number of firms in an R&D race, n*.

(b) The number of firms that would race to develop the product if the winner were granted a permanent patent (monopoly profits forever). Does it make sense to grant such patents?

(c) Calculate the government prize, P that would induce the optimal amount of research.

 

 


Related Discussions:- Calculate the monopoly profits and probability

Kurtosis, how solve and get kurtosis

how solve and get kurtosis

Capital budgeting techniques, Capital budgeting Techniques Financial com...

Capital budgeting Techniques Financial commitment spending budget (or investment appraisal) is the planning process used to figure out whether a company long run purchases such

Hypothesis testing, After analyzing the data the researcher has to test ten...

After analyzing the data the researcher has to test ten hypotheses various tests such as chi square test t test have been developed by statisticians for the purpose. The hypotheses

Mean - median and frequencies, Put the appropriate summary statistics, e.g....

Put the appropriate summary statistics, e.g. mean, median, frequencies, percentages, for the different variables into a table to make them concise. You can see examples of consise

Correlation analysis and coefficient, Individual Music scores Mathematics s...

Individual Music scores Mathematics scores Angela 2 8 Arthur 6 3 Peter 4 9 Mike 5 7 Barbara 7 2 Jane 7 3 Jean 2 9 Ruth 3 8 Alan 5 6 Theresa 4 7 Assess the data using a Correlation

Calculate the unit of omputer peripheral device, Northern Hi-Tec Electronic...

Northern Hi-Tec Electronics Limited manufactures six computer peripheral devices: internal modems , external modems , circuit boards , CD drives , hard disk drives , and memo

Mineral water factory., what is the point that i have to konow about the co...

what is the point that i have to konow about the cost accounting inorder to eneter in job

Amount to be provided for retirement of long-term obligation, Amount to be ...

Amount to be provided for retirement of long-term obligations An “other debit” common journal value used in the General Long-Term Bills Additional Consideration that symbolizes t

Material & labour variances, standard material qty per unit- 2 kg standard ...

standard material qty per unit- 2 kg standard price per kg - 4 rs actual value of material purchased- 4000 rs closing stock- 200 kg actual usage- 2.5 kg finished stock sold- 200 u

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