Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Consider the following game. Firm 1, the leader, selects an output q1, after which firm 2, the follower, observes the choice of q1 and then selects its own output q2. The resulting price is one satisfying the industry demand curve P = 200 − q1 − q2. Both firms have zero fixed costs and a constant marginal cost of 10.
a. Derive the equation for the follower firm’s best response function. Draw this equation on a graph with q2 on the vertical axis and q1 on the horizontal axis. Indicate the vertical intercept, horizontal intercept, and slope of the best response function.
b. Determine the equilibrium output of each firm in the leader-follower game. What are each firm’s profits in the equilibrium?
c. Now let the two firms choose their outputs simultaneously. Compute the Cournot equilibrium outputs and industry price. Who loses and who gains when the firms play a Cournot game instead of the Stackelberg one?
When prices are ($4, $2), Valerie chooses the bundle (9, 18), and when prices are ($1, $2), she chooses the bundle (8, 14). Is Valerie's choice of bundles consistent with the Weak Axiom of Revealed Preference.
For the purpose of stabilizing the macro economy, which of the policies below are suitable for a situation when aggregate demand is excessive, or when there is a large -GDP gap?
If elasticities for a bottle of water are -0.8 and -1.2 in two different locations and marginal cost is the same, which location is likely to charge higher price for the bottle of water?
The GDP deflator in 2000 is 100. The GDP deflator in 2010 is 127. If real GDP in 2000 is $10 trillion and nominal GDP in 2010 is $14 trillion, how much has real GDP grown over that time period?
In classical macroeconomic theory, the concept of monetary neutrality means that changes in the money supply do not influence real variables. Explain why changes in money growth affect the nominal interest rate, but not the real interest rate.
Calculate the following elasticities and classify good x. The market situation is as follows: m=$100, Px=Py=$10
Show graphically and explain what happens in the Cars market, include effects on Price and Quantity. What would happen to the equilibrium price and quantity of cars if the price of steel increased?
Let’s say that there are many non-traded goods relative to traded goods. You are comparing the income of a rich country to the income of a poor country. For the poor country, do you expect PPP-adjusted income to be higher or lower than income calcula..
Identify the two events that can cause a shift in the Production Possibilities curve.
what amount of additional government spending (without changing taxes) would be needed to reach the desired increase of GDP? 2) what change in total amount of direct taxes (without changing government spending) would be necessary to reach the same in..
Use the accompanying graph to illustrate the short-run equilibrium of a monopolistically competitive firm. (b) At the equilibrium, what is (i) Price? (ii) Output? (iii) Total profit? (c) Identify the long-run equilibrium of the same firm. (d) In long..
A market is characterized by a demand curve that can be expressed as P = 3000 – 10 Q. Each of the two identical firms currently serving the market has a total cost function of the form C = 250 q. There are no fixed costs. If the 2 duopolists behave a..
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd