Calculate the profit maximizing output for industry leader

Assignment Help Business Economics
Reference no: EM131169310

The automobile market has been used as an example of a Stackelberg oligopoly where one firm is the industry leader and the other firms will follow that lead. Assume the following equations were estimated for the automobile industry:

P=1000-(Q1+ Q2)

Ci=4Qi

Where Q2 represents the total output of all the followers in the industry.

Calculate the profit maximizing output for the industry leader, Q1.

Calculate the profit maximizing output tor the industry followers, Q2.

Calculate the profits for the leader.

Calculate the profits for the followers.

Reference no: EM131169310

Questions Cloud

Analyze four economic indicators : Analyze four economic indicators (unemployment rate, quits rate (quit rate in U.S. English), housing starts, consumer price index (a measure for inflation), consumer leverage ratio, industrial production, bankruptcies, gross domestic product, broadba..
Effect of introducing tax rate on consumer budget constraint : In the consumption savings model, assume that lump-sum taxes are zero and the utility function is given by U(c, c') = log c + β log c'. Suppose the government taxes on interest earnings i.e. borrowers face interest rate r while lenders face interest ..
Determine the effects of this on current aggregate output : Suppose that there is an increased confidence of the economy, shared among the economic agents: the representative consumer becomes optimistic of the economic performance and therefore, is willing to consume more, given his/her own income. determine ..
When the real economy expands-demand for money expands : When the real economy expands (Y rises), the demand for money expands. As a result, households hold more cash and the supply of money expands. Inflation, a rise in the price level, causes the demand for money to decline. Because inflation causes mone..
Calculate the profit maximizing output for industry leader : The automobile market has been used as an example of a Stackelberg oligopoly where one firm is the industry leader and the other firms will follow that lead. Assume the following equations were estimated for the automobile industry. Calculate the pro..
Immediately take full-time job in family construction firm : Joe expects to graduate from WSU in December 2019 and immediately take a full-time job in his family's construction firm. At that time, Joe could buy a new car using a loan requiring payments of $490 a month for six years, with the first payment bein..
Appreciating against other currencies : Assume that the US dollar has been appreciating against other currencies. Please explain how this higher value of US dollar would affect the following firms (in a positive or negative way).
Affect the cost for health insurance companies : When more people buy the more expensive brand name drugs rather than the cheaper generic drugs, how does this affect the cost for health insurance companies? Hint: We are now looking at the health insurance market, not the health care market.
Exports and imports and net exports : What is happening to the US exports and imports and net exports in each of the following situations?

Reviews

Write a Review

Business Economics Questions & Answers

  Propositions and predictions about the world

In evaluating the accuracy of their statements, should one distinguish between (i) economist’s descriptive statements, propositions, and predictions about the world, and (ii) their statements about what policies should be adopted. Explain in detail

  Global responsibilities

Even though China's has been better than before to take up its global responsibilities, why has its performance been mixed in the view of other countries?

  Why invest capital in purely competitive industries

Why invest capital in purely competitive industries with equilibrium margins that are razor thin and entrants that erode quasi- profits? Suppose volume is not exceptionally large, why then?

  Compounded quarterly will quadruple in amount

A sum of money invested at 10% interest, compounded quarterly, will quadruple in amount in approximately how many years?

  Present equivalent of the rental income equals

Suppose that annual income from a rental property is expected to start at?$1,250?per year and decrease at a uniform amount of?$50?each year after the first year for the?17-year? expected life of the property.

  Evaluate the effectiveness of the training experience

Training is maximized when leaders set clear expectations for learners, use techniques for reinforcing learning during training, and take steps to ensure that the desired performance is maintained after training. First, briefly describe one of your j..

  Which country will have the higher sacrifice ratio

The firms and workers in Bayernland form expectations rationally. The firms and workers in Realland form expectations adaptively. Their otherwise identical economies are initially in equilibrium at the natural level of output with 6 percent inflation..

  The absolute advantage in producing each good

Suppose Jilbo can make 18 flower pots or 2 coffee mugs per day. Her cousin Jimbo can make 10 flower pots or 6 coffee mugs per day. What is the opportunity cost for Jilbo of producing 1 flower pot? of 18 flower pots?  What is the opportunity cost for ..

  Difference in average operating time for the two samples

You are assessing the difference in the average time that two new fully-charged solar batteries can produce electricity before they need to be again exposed to the sun. Using a sample of 50 Type 1 batteries and 50 Type 2 batteries, you build a 90% co..

  Consider an exchange economy with two goods

Consider an exchange economy with two goods, good 1 and good 2, and two consumers, A and B. The preferences of the consumers can be described by a convex indifference curve. A’s initial endowment consists of 10 units of good 1 and 15 units of good 2,..

  Payoff for every firm depends upon the pricing strategies

Neither firm can choose which cell of the payoff matrix to obtain; the payoff for every firm depends upon the pricing strategies of both firms.

  Argument against government regulation of a monopoly

You have learned that a monopolist is a price-setter which charges a price above marginal cost. Provide BOTH and argument for and then an argument against government regulation of a monopoly.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd