Question

In: Finance

You are an industry analyst that specializes in an industry where the market inverse demand is...

You are an industry analyst that specializes in an industry where the market inverse demand is P = 200 - 2Q. The external marginal cost of producing the product is MCExternal = 9Q, and the internal cost is MCInternal = 14Q. Instructions: Enter your responses rounded to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output.

Solutions

Expert Solution

jeff jeffy answered 7 months ago
Next > < Previous

Related Solutions

You are an industry analyst that specializes in an industry where the market inverse demand is...
You are an industry analyst that specializes in an industry where the market inverse demand is P = 250 - 3Q. The external marginal cost of producing the product is MCExternal = 10Q, and the internal cost is MCInternal = 18Q. Instructions: Enter your responses rounded to the nearest two decimal places. a. What is the socially efficient level of output? _______ units b. Given these costs and market demand, how much output would a competitive industry produce? _______ units...
You are an industry analyst that specializes in an industry where the market inverse demand is...
You are an industry analyst that specializes in an industry where the market inverse demand is P = 300 - 5Q. The external marginal cost of producing the product is MCExternal = 8Q, and the internal cost is MCInternal = 14Q. Instructions: Enter your responses rounded to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given...
Consider the following industry where the inverse market demand is given by the function: p=180-Y where...
Consider the following industry where the inverse market demand is given by the function: p=180-Y where Y is the total market output. There are two firms in the market, each has a total cost function: ci (yi)=3(yi)2 where i=1,2 is the label of the firm. Suppose the firms act as Cournot duopolists. What output level will each firm produce in order to maximize profits?.
Consider a market where inverse demand is given by P = 40 − Q, where Q...
Consider a market where inverse demand is given by P = 40 − Q, where Q is the total quantity produced. This market is served by two firms, F1 and F2, who each produce a homogeneous good at constant marginal cost c = $4. You are asked to analyze how market outcomes vary with industry conduct: that is, the way in which firms in the industry compete (or don’t). First assume that F1 and F2 engage in Bertrand competition. 1....
Consider a Monopolist where the inverse market demand curve for the produce is given by P...
Consider a Monopolist where the inverse market demand curve for the produce is given by P = 520 − 2Q. Marginal Cost: MC =100 + 2Q and Total Cost: 100 .50 2 TC = Q + Q + [1 + 1 + 1 = 3] Calculate: (a) Profit Maximizing Price and Quantity. (b) Single Price Monopolist Profit. (c) At the profit maximizing quantity, what is the Average Total Cost (ATC) for the Consider a Monopolist where the inverse market demand...
Two firms compete in a market with inverse demand P(Q) = a − Q, where the...
Two firms compete in a market with inverse demand P(Q) = a − Q, where the aggregate quantity is Q = q1 + q2. The profit of firm i ∈ {1, 2} is πi(q1, q2) = P(Q)qi − cqi , where c is the constant marginal cost, with a > c > 0. The timing of the game is: (1) firm 1 chooses its quantity q1 ≥ 0; (2) firm 2 observes q1 and then chooses its quantity q2 ≥...
6. Assume an industry with two firms facing an inverse market demand of P = 100...
6. Assume an industry with two firms facing an inverse market demand of P = 100 - Q. The product is homogeneous, and each firm has a cost function of 600 + 10q + 0.25q2. Assume firms agree to equally share the market. a. Derive each firm’s demand curve. b. Find each firm’s preferred price when it faces the demand curve in part a. Now assume that firm 1’s cost function is instead 25q + 0.5q2 while firm 2’s is...
Suppose the inverse market demand equation is P = 95 – 10Q and the inverse market...
Suppose the inverse market demand equation is P = 95 – 10Q and the inverse market supply equation is P = 5 + 5Q. A price floor of $85 will result in: a. a shortage of 10 units. b. a shortage of 15 units. c. a surplus of 10 units. d. a surplus of 15 units. e. None of the above.
3. The inverse market demand for mineral water is P = 200-10Q, where Q is the...
3. The inverse market demand for mineral water is P = 200-10Q, where Q is the total market output and P is the market price. Two firms, A and B, have complete control over the supply of mineral water and both have zero costs. a. Operating independently, how would each firm determine the quantity to be produced? Will this quantity maximize the profits of both firms?
3. The inverse market demand for mineral water is P = 200-10Q, where Q is the...
3. The inverse market demand for mineral water is P = 200-10Q, where Q is the total market output and P is the market price. Two firms, A and B, have complete control over the supply of mineral water and both have zero costs. a. Operating independently, how would each firm determine the quantity to be produced? Will this quantity maximize the profits of both firms?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT