+1-415-670-9189
info@expertsmind.com
Accounting for supply by the competitive fringe
Course:- Microeconomics
Reference No.:- EM13700128




Assignment Help
Assignment Help >> Microeconomics

The world willingness to pay for oil is given by P = 200 - Q, with P in dollars per barrel and Q in thousands of barrels per month, and OPEC is planning its strategy to set the world oil price. The competitive fringe of small firms takes the price OPEC sets as given. The fringe marginal cost curve is MC = 40 + Q, and OPEC's marginal cost of producing oil is constant at $20/barrel.

(a) What is the residual demand that OPEC faces after accounting for supply by the competitive fringe?

(b) How much oil will OPEC supply, acting as a cartel?

(c) What is the resulting world oil price?

(d) How much oil is supplied by the competitive fringe?




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Microeconomics) Materials
Explain how one of the components of the GDP would help you to predict the amount of inventory to keep in stock if you were the owner of a retail store and were placing a merc
The following table gives the demand and supply for pairs of winter boots at two different prices.  Assume that the demand and supply functions are linear. Calculate the dem
What will be the dynamics of the capital stock in the long run - how will the consumption level of a typical citizen evolve over time and What savings rate would give rise to
You purchase your home with a $300,000, 15-year fixed, 4.25 % mortgage loan. After 6 years, 72 monthly payments, you are offered to refinance the balance of your loan with a
What number of drivers appears to be most efficient in terms of output per driver and what number of drivers appears to minimize the marginal cost of transportation assuming
State two levels of significance (literally; you must write down two values) at which the null hypothesis is rejected. State two levels of significance at which the null hypot
Analyze the impact, both in the short run and in the long run, on the market equilibrium as well as firm C's profit-maximizing output level and total economic profit, due to
Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4