Log in
Economics
1
answer
0
watching
85
views

Given: Market Demand Curve: Q=100-2P
Industry/ Firm Cost Function: TC=2q
Assumptions:
1. These are only 2 firms in the industry.
2. If the firm are competitive (or seemingly competitive), theyequally share the industry output.
3. If the firms collude, they exercise equal market power (theyequally share the industry output)
Solve for the profit maximizing industry and firm output, price andfirm profits under:
a. Quasi-competitive market
b. Cartel Model
c. Cournot Model

Watch
1
answer
0
watching
85
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Kelleb Mloyi
Kelleb MloyiLv2
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Suppose you are given the following information about a particular PERFECTLY COMPETITIVE INDUSTRY:

The market demand curve is Q = 6500 - 100P

The market supply curve is Q = 1200P

You are also given the following information about a single PERFECTLY COMPETITIVE FIRM that operates in this industry:

The total cost function for the firm is TC = 722 + (Q^2 /200)

The marginal cost for the firm is MC = (2Q/200)

a. Calculate the profit-maximizing level of output for the individual firm and the price they charge.

b. Would you expect to see entry into or exit from this industry in the long-run? EXPLAIN YOUR REASONING. In addition, CALCULATE the price at which entry into or exit from the industry will stop.

c. Clearly explain why firms will continue to remain in the industry even when economic profits are driven to zero in the long run.

Competitive firm has a short run total cost function given by:

SRTC = q^2 + 100

The corresponding short run marginal cost function is:

SRMC = 2q

a. If the market price is 60, how much output will th efirm produce?

b. Find the firms profits at this level of output

c. Find the equation of the firms short run supply curve

d. If there are 100 identical firms in the market, find the equation of the industry supply curve.


Thanks in advance

6. Power Printers Total Costs (per hour)

q TC

0 65

1 80

2 95

3 120

4 150

5 200

If the price of a printer is $50 in this perfectly competitive industry, what is the profit-maximizing rate of output?

7. Which of the following is NOT true in a perfectly competitive market?

a. There is free entry and exit into the industry.

b. Each firm produces a differentiated product.

c. Each firm faces a perfectly elastic demand curve.

d. Price is equal to marginal revenue at every output level for the firm.

8. A perfectly competitive firm should always continue to operate in the short run as long as:

a. P < ATC at the rate of output where MR = MC.

b. P < AVC at the rate of output where MR = MC.

c. MR > AVC at the rate of output where MR = MC.

d. MR > AFC at the rate of output where MR = MC.

9. A firm that makes zero economic profits:

a. Must eventually go bankrupt.

b. Should shut down.

c. Incurs a loss, but should not shut down.

d. Covers all its costs, including a provision for normal profit.

10. A monopoly firm is different from a competitive firm in that:

A. There are many substitutes for the monopolist’s product whereas the competitive firm’s demand curve is perfectly elastic.

B. The monopolist’s demand curve is perfectly inelastic, whereas the competitive firm’s demand curve is perfectly elastic.

C. The monopolist can influence the price in the market, whereas the competitive firm is a price taker.

D. All of the above

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in