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Q. Two retail rms compete in costs in a downstream market in which base demand as well as is given by Pr = 1-Q. The rms can provide service is 2 f0; 1g in order to augment demand as well as (e.g., they can Clarify all the features of the good for sale). However, such service is non-appropriable in that it cannot be conditioned on a customer making a purchase. As a result, service is in effect a public good. Specifically, Assume that if the rms offer service levels of s1 2 f0; 1g as well as s2 2 f0; 1g, demand as well as is Pr = 1 + max (s1; s2) - Q. Assume further that if rms charge the same cost, customers will randomly choose to buy at a rm that provided service (if both provide service or if neither provide service the market is split evenly). The cost of providing service is c(s) =:1 if s = 1; 0 if s = 0: The only other cost that the retailers have is the wholesale cost Pw for the good. Assume that this cost is set by an upstream wholesaler with monopoly pricing power.
1. If the wholesaler can only set the wholesale cost Pw as well as then simply sells to the retailers whatever they demand as well as, what is the equilibrium wholesale cost, Pw, the equilibrium level of service provision s1; s2 as well as the equilibrium retail cost Pr?
2. Assume that the wholesaler can impose retail cost maintenance that commits the downstream retailers to charge a minimum cost P min. Given this option, what is the equilibrium minimum cost P min, the equilibrium wholesale cost, Pw, the equilibrium level of service provision s1; s2 as well as the equilibrium retail cost Pr?
Why do national income accountants compare market value of total outputs in various years rather than actual physical volumes of production.
q1. the demand for tulips in delft holland is estimated by the following linear regression asqd125-15p5ywhere y is
Daily demand for admission tickets can be written as P = 36 - 0.05Q so that MR = 36 - 0.1Q, where P is the price of a ticket and MR is the marginal revenue. Elucidate at what price will CPT sell admission tickets to maximize its profit.
The companys marketplace department estimated a linear demand function for Border's picante sauce:
Assume Doughnuts R Us chooses to produce 150 doughnuts. What is the number of doughnut shops in the market.
You should recommend that the project be rejected because, although its NPV is positive, its MIRR is less than the WACC, and that indicates that the firm's value will decline if it is accepted.
compute the price elasticity of demand between successive points. Which price maximizes publisher's revenues. Calculate and explain.
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Paul owns a home on the top of a hill and enjoys an unobstructed view of a large wooded area.
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Classify each of the following scenarios as an example of adverse selection or moral hazard. Be sure to support your answer! Nordstrom†TM s cannot predict who is going to be a good shoe salesperson.
Illustrate what are the costs associated with this non-native species.
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