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Suppose you are given the following information:
Market demand- P= 60-q where Q is the total amount of the good supplied in the market-
A. Assume that there are two firms in this market Firm A and Firm B. Furthermore, Firm A's total cost function is given by Ca (qa) = 10 + Q^2 a and firm B's total cost function is given by Cb(qb) = 10 + q^2 b. Suppose that the two firms decide to collude( split output and production evenly) and work as a monopolist. Fund the market price, output, and profits of each firm. Explain
B. Explain why this is not a Nash equilibrium in this market under quantity (Cournot) competition.
When the Fed adds new reserves to the system, some of these new reserves find their way out of the country into foreign banks or foreign investment funds. In addition, some portion of these new reserves ends up in people's pockets and mattresses inst..
An example of a positive externality is
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Potato farming (like farming of most agricultural products) is highly competitive. Price is determined by demand and supply. Based on U.S. Department of Agriculture statistics, U.S. demand for potatoes is estimated to be QD = 184 - 20P, where P is th..
What are some of the main points of dispute with regard to the No Child Left Behind Act? How do you feel about some of these criticisms? In what ways can/should the Christian church help to improve the learning of children in this country?
If marginal cost exceeds average total cost in the short run, then which is likely to be true?
What do you expect to happen to your sales. How would you answer parts a and b if you expected a 5 percent increase in income instead of a decrease.
Suppose the market demand curve is P=40-2Q and the constant marginal cost of production is MC = 20. Which of the following is a valid expression for the collusion curve?
A firm is considering an investment that will earn a 6% rate of return. If it were to borrow the money, it would have to pay 8% interest on the loan, but it currently has the cash, so it will not need to borrow. Should the firm make the investment? ..
By how much should domestic auto-makers increase the cost of automobiles if they wish to increase sales by 5 percent next year.
The first national bank received 3,000 inquiries following the latest advertisement decribing its 30-month IRA accounts in the Boston World, a local newspaper. The most recent as in similar advertising campaign in Massachusetts Business, a regional b..
A firm that produces and distributes electricity has mostly fixed costs. It also tends to be the only provider of electricity in its market. This is an example of pure monopoly resulting from the firm:
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