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

Ask Question & Get Answers from Experts
Browse some more (Microeconomics) Materials
There are 6 tokens on the table. Two players alternate removing some of the tokens. In each move any player can either remove exactly one or exactly two tokens. Whoever remov
Suppose the demand for oranges in the U.S. is: P = 5.35 - .012 Q. Where Q is the quantity demanded for oranges in the U.S. (measured in millions of boxes per year) and P is th
As an economist you have been tasked to address a meeting of a company on international professional to describe the differences between micoeconomics and maroeconomic and giv
Pham can work as many or as few hours as she wants at the college bookstore for $11 per hour. But due to her hectic schedule, she has just 19 hours per week that she can spend
Suppose that the distribution of scores on an exam is closely described by a normal curve with mean 100. The 16th percentile of this distribution is 80. What is the 84
The government is considering increasing the tax on gasoline by $3 per gallon and has asked you to determine the impact on Janet's consumer surplus. Janet spends 5% of her i
A copper wire of 5-mm radius is used as a loop antenna. The antenna radiates at a frequency of 3 MHz. If the loop radius is 0.5 m, and the maximum current in the loop is 100
Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4