Question

In: Economics

Suppose that the four largest maple syrup manufacturers in a country decide to collude and set...

Suppose that the four largest maple syrup manufacturers in a country decide to collude and set prices in the market. Based on demand conditions every? year, they decide the quantity of maple syrup that will be supplied to maintain a certain market price.

This is an example of a _____(Bertrand oligopoly/Cournot oligopoly)

This cartel would succeed if? ___________.

A.

firms value profits more today than in the future.

B.

detection of cheaters is difficult.

C.

the market has substantial long?term value.

D.

it is hard to punish cheaters.

Are firms more likely to cheat if the cartel decided to fix prices only once as opposed to fixing prices every? year?

A.

?No, because there is no threat of new firms entering.

B.

?No, because the market is less profitable.

C.

?Yes, because future punishment for cheating? isn't possible.

D.

?Yes, because future periods have more value

2. For a market to be characterized as monopolistically competitive?, there must be? __________.

A.

zero economic profits in the long run.

B.

many sellers.

C.

differentiated products.

D.

all of the above.

An example of a monopolistically competitive firm

is the? __________.

A.

patented drug market.

B.

fast dash food industry

C.

local water company.

D.

wheat market.

Expert Solution

Suppose that the four largest maple syrup manufacturers in a country decide to collude and set prices in the market. Based on demand conditions every? year, they decide the quantity of maple syrup that will be supplied to maintain a certain market price.This is an example of a Cournot oligopoly because the firms choose the level of quantities.

This cartel would succeed if the market has substantial long?term value because only then no frim will have the incentive to deviate.

Are firms more likely to cheat if the cartel decided to fix prices only once as opposed to fixing prices every? year?- ?Yes, because future punishment for cheating? isn't possible.

For a market to be characterized as monopolistically competitive?, there must be all the above zero economic profits in the long run, many sellers. differentiated products.

An example of a monopolistically competitive firm is the fast dash food industry

Rahul Sunny answered 2 years ago

Suppose you own a small maple syrup company which requires employees to feed wooden logs into...

Suppose you own a small maple syrup company which requires employees to feed wooden logs into large machines that burn the logs and boil water out of the sap.At current units of production, one machine and a worker working for a day can produce 100 bottles of maple syrup. A new machine could be rented for $1000/day while new workers can be hired for $100/day but having an additional machine would produce 90 bottles of maple syrup, while an additional...

Four senior executives of the world’s largest firms with extensive holdings outside the home country speak....

Four senior executives of the world’s largest firms with extensive holdings outside the home country speak. Company A: “We are a multinational firm. We distribute our products in about 100 countries. We manufacture in over 17 countries and do research and development in three countries. We look at all new investment projects both domestic and overseas- using exactly the same criteria”. The execution from Company A continuous, “of course most of the key posts in our subsidiaries are held by...

Suppose that one of the largest commercial banks in your country has recently experienced a significant...

Suppose that one of the largest commercial banks in your country has recently experienced a significant distress which led to the bank being put under special management by the central bank. As the newly appointed caretaker CEO of the distressed commercial bank, you are required to present a turnaround management strategy for the bank to the senior management of the central bank. Carefully articulate your turnaround management strategies that would return the bank to a sustainable profitable path. The proposed...

Suppose you were sent on an overseas assignment to another country (you decide which one). Research...

Suppose you were sent on an overseas assignment to another country (you decide which one). Research that country's economic, political/legal, and cultural environments. Write a report summarizing your findings.