+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 your reasons for classifying the actors as you do. Use specific references to the film and pay special attention to how these decisions impacted characterization.
Write a study blog on a local economic development case (either in the US or other countries), discuss the role government played in the case, and analyze the economic, soci
Given the demand and cost estimates, what price should you change if you want to maximize your weekly profit?What output should you produce? What is your weekly profit?
Identify three or more competitive strategies that Starbucks may use to maximize its profits in a monopolistic market. Evaluate the efficacy of these strategies in the monopol
Analyze how production and cost functions in the short run and long run affect the strategy of individual firms and use technology and information resources to research issues
Draw the graphs of the ATC, AVC, and MC curves. What is the relationship between the ATC and AVC curves? Between the MC and AVC curves? Suppose that Al discovers new technol
An article on Bloomberg.com reported in 2012 that the People's Bank of China "cut the amount of cash that banks must set aside as reserves for the third time in six months,
If the cost of producing Newton’s Donuts is constant at $0.15 per donut, should they reduce the price and thereafter, sell more donuts (assuming profit maximization is the com