1. Two firms produce a homogeneous product with an inverse market demand given by P = 100 – 2Q, where Q = q₁+q₂. The first firm has a cost function given by C₁=12q₁and the second firm has a cost function given by C₂=20q₂. The firms make simultaneous output choices to maximize profit. Determine the equilibrium values of firm outputs, market output, price, and firm profits.
2. With reference to question 1, now assume that decision-making is sequential with firm 1 choosing its output first (leader) and firm 2 choosing second (follower). Determine the equilibrium values of firm outputs, market output, price, and firm profit levels.
3. In the above question, there is clearly an advantage to the firm that chooses first. How should we measure the value of the first-mover advantage? Calculate this value for the first firm relative to values in question 1.
4. Return to the situation in question 1. Suppose demand increases by 100 units at each price. Solve for the equilibrium values of firm outputs, market output, price and firm profits.

1. A monopolist faces a market demand curve given by Q^D= 100 – P/3 and has a cost function described by C = 30Q +1.5Q². Solve for the monopolist’s profit maximizing output and price.
2. With reference to question 4 above, suppose the demand facing the monopolist increases to Q^D= 120 – P/2. Solve for the new profit maximizing values of price and quantity. Describe how the two answers differ and explain those differences in terms of the demand change.
3. The market for coats is perfectly competitive with market supply given by Q^S= 2500 + 40P and market demand given by Q^D given by Q^D= 7500 – 10P. Solve for the equilibrium values of price and quantity. Calculate the values of elasticity of demand and elasticity of supply at the equilibrium.

1. A perfectly competitive industry faces a demand curve given by Q^D= 2515 – 2P. The long-run total cost curve of each firm is given by LTC = 10q -.2q²+.004q³. Derive the long-run equilibrium values of output per firm, market output, price, and the number of firms.
2. You are told that in long-run perfectly competitive equilibrium each firm produces 25 units and that the marginal cost at that level of output is $10. Solve for the long-run equilibrium values of market output, price, and the number of firms. The market demand is given by Q^D= 4000 – 10P.
3. Assume the world market for calcium is perfectly competitive and that all existing producers and potential entrants are identical. Consider the following information about the price of calcium. Between 1990 and 1995, the market price was stable at $2/pound. In the first three months of 1996, the market price doubled reaching $4/pound, where it stayed for the remainder of 1996. Throughout 1997 and 1998, the price declined, eventually reaching $2/pound by the end of 1998. Between 1998 and 2002, the price remained stable at $2/pound. Assume that technology has not changed and that input prices have remained constant over the period. Using words, explain this pricing pattern over the period.

As the owner of the only tennis club in an isolated wealthy community, you must decide on membership dues and fees for court time. There are two types of tennis players. "Serious" players have demand Upper Q 1 equals 10 minus Upper PQ1=10−P where Q1 is court hours per week and P is the fee per hour for each individual player. There are also "occasional" players with demand Upper Q 2 equals 4 minus 0.25 Upper PQ2=4−0.25P Assume that there are 1 comma 0001,000 players of each type. Because you have plenty of courts, the marginal cost of court time is $00. You have fixed costs of $15 comma 00015,000 per week. Serious and occasional players look alike, so you must charge them the same prices. a. Suppose that to maintain a "professional" atmosphere, you want to limit membership to serious players. How should you set the annual membership dues and court fees (assume 52 weeks per year) to maximize profits, keeping in mind the constraint that only serious players choose to join? What would profits be (per week)?  (round your answers to two decimal places)

1. If the reserve ratio at the Toronto Dominion Bank is 2.5% and $40,000 is deposited, how much money is created if all available funds are loaned to firms and individuals?

2. What impact will the decrease in interest rate have on investment, unemployment, GDP, household income, and prices? (increase or decrease)

What is the pricing strategy of AB InBev. company?

1.

a. A firm is currently in equilibrium. They use workers and capital in production. Suppose that they undergo a positive technology​ change, making workers more productive. How will this affect their choice of labor used in​ production? When will they stop making​ changes, if​ any

b. In early​ 2018, President Trump endorsed a 25​ cent-per-gallon gas tax increase. Would this tax be​ progressive, regressive, or​ proportional?

Investment is ________ related to the interest rate, while net capital outflow (NCO) is ________ related to the interest rate.

Using the information in the table shown, what is the inflation rate in 2014?

As new goods and services become available:

Many governments actively work to:

Koala Entertainment Limited (KEL) is a leading entertainment, artists and performance brokerage agency （演出經紀機構） in Australia. KEL founder Mr Wright realised that China is a world-class media and entertainment platform and wants to begin penetrating the firm’s popular musical, magic shows there, but KEL has little international experience. Mr Wright is unaware of the various types of investment and nontariff trade barriers that KEL might face in China.

Q. What can KEL management do to minimise the threat of government intervention? Explain the FOUR strategies with an example based on the above case. (~300 words)

Below are six strategies and only four is needed.

• Research to gather knowledge and intelligence. Understand trade and investment barriers abroad. Scan the business environment to identify the nature of government intervention.

• Choose the most appropriate entry strategies. Most firms choose exporting as their initial strategy, but if high tariffs are present, other strategies should be considered, such as licensing, or FDI and JVs that allow the firm to produce directly in the market.


• Take advantage of foreign trade zones. FTZs are areas where imports receive preferential tariff treatment, intended to stimulate local economic development. e.g., A successful experiment with FTZs has been the maquiladoras — export-assembly plants in northern Mexico.

• Seek favourable customs classifications for exported products. Reduce exposure to trade barriers by ensuring that products are classified properly.


• Take advantage of investment incentives and other government support programs.

• Lobby for freer trade and investment. Increasingly, nations are liberalizing markets in order to create jobs and increase tax revenues.

QUESTION 9 - 5.2

What is the supply response character for agricultural output in the short run?

QUESTION 10 - 5.2

What happens to the degree of industry concentration if existing firms merge or buy out competitors?

QUESTION 1 - 6.1

Suppose you operate a wholesale business that sells and delivers bulk coffee to office break rooms. You are the only firm that provides this service in your city, so you hold a local monopoly position in this market. If the price of gasoline declines for your delivery fleet, your marginal cost curve will shift downward. What happens to your profit maximizing level of output?

QUESTION 2 - 6.1

Which of the following statements is true?

QUESTION 7 - 6.3

I dislike using Microsoft Word and prefer to use other work processing software. However, nearly everyone that I work with uses Word, so I have to use this product when writing articles, books, and other research reports. For this reason, Microsoft Word holds a near-monopoly position in the word processor market. What is the barrier to entry that helps Microsoft maintain their market power?

QUESTION 8 - 6.3

Suppose there are 100 firms that sell athletic shoes and each has one percent of the market share. What is the HHI statistic for this market?

QUESTION 9 - 6.3

Suppose there are six firms in the breakfast cereal market. The four largest firms have 20 percent of the market share each, and the two smallest firms have 10 percent of the market share each. If one of the largest firms buys one of the smaller firms, what is the market share of the largest firm in the market after the buyout is concluded?

QUESTION 10 - 6.3

What happens to the profits of monopolistically competitive firms in the long run?

The sandwich shop is a restaurant that serves only one item, the ham sandwich. The restaurant serves two groups of customers, younger adults and senior citizens. The two segments have the following demand functions: younger adults, Q_y = 5,000 – 10P_y and senior citizens, Q_s = 10,000 – 100P_s. The restaurant has constant marginal cost of $10 and no fixed costs.

(4)a. Write the inverse demand and marginal revenue functions for each segment of the ham sandwich market.

(4)b. What are the profit maximizing price and quantity for each segment and how much profit will he earn?

(4)c. What are the price elasticities of demand for each segment at the prices and quantities you determined in part “b”