+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
In 2009, Congress and the president enacted "cash for clunkers" legislation that paid up to $4,500 to people buying new cars if they traded in an older, low-gas-mileage car.
Suppose Dave still has $300 to spend, but the price of a DVD rises to $12, while the price of a CD drops to $6. Is Dave better or worse off than he was before the price chan
You decide to open a retirement account at your local bank that pays eight percent/year/month (eight percent per year compounded monthly). For the next 20 years, you will depo
George has been selling 5,000 T-shirts per month for $8.50. When he increased the price to $9.50 he sold only 4,000 T-shirts. What is the demand elasticity? If his marginal
The firm is considering a quantity discount. The first 400 units can be purchased at a price of $120, and further units can be purchased at a price of $80. How many units will
When her income falls from $50,000 to $20,000, Alex increases her monthly purchase of hamburger from 20 pounds to 35 pounds. Using the midpoint method, Alex's income elasticit
What type of stabilizing fiscal policy is an increase in the health care budget for citizens without coverage? What type of stabilizing fiscal policies arise because tax reven
The price of a stock is determined by the demand for and supply of that stock. Both demand and supply depend on investors' expectations of the future performance - future econ