What is the profit earned by each firm in the industry

Assignment Help Business Economics
Reference no: EM131378565

Suppose that there are only two firms (Firm A and Firm B) in the market for decorative lampshades. Let the inverse demand function and the total cost function be given by: P = 50 –Q   and TC = 2Q

Assume that Firm A and Firm B sell identical lampshades. The firms compete with each other bychoosing the price at which they sell their products. Firms set their prices simultaneously.

(a) How many lampshades would be produced by the entire industry? What price would be charged foreach lampshade?

(b) What is the profit earned by each firm in the industry?

Reference no: EM131378565

Questions Cloud

Analyze whether united states foreign policy : In an essay three-to-five paragraphs long, analyze whether United States' foreign policy has been motivated mostly by a desire to promote democracy and human rights since the end of World War II
Why did they use this method to get access to resources : Japan claimed to be establishing anti-communist Chinese states and providing economic development assistance in exchange for access to resource like iron and coal. they later expanded into Southwest Asia to get rubber and oil
Identify the periods of the phenomenon of decolonization : Define "decolonization." Identify the periods of "the phenomenon of [the] decolonization" of Africa post World War II
Solve for the market price for the lampshades : Suppose that there are only two firms (Firm A and Firm B) in the market for decorative lampshades. Let the inverse demand function and the total cost function be given by: P = 50 –Q   and TC = 2Q. Solve for the equilibrium quantity produced by Firm A..
What is the profit earned by each firm in the industry : Suppose that there are only two firms (Firm A and Firm B) in the market for decorative lampshades. Let the inverse demand function and the total cost function be given by: P = 50 –Q   and TC = 2Q. How many lampshades would be produced by the entire i..
Explain strategic substition : Explain Cournot competition. Illustrate and explain strategic substition. Illusrate and discuss the operation of the Cournot model as it relates to the empirical evidence regarding 1) price markups over marginal cost and the number of competitors and..
Graphically illustrate how two-part pricing strategy works : Explain and graphically illustrate how a two-part pricing strategy works when consumers all have identical demand characteristics. Clearly label on your graph the access fee, user fee, and the profits that the seller receives. What is true about the ..
Monopolist sells to two markets : A monopolist sells to two markets: in market 1 there is a constant elasticity of demand e1 -1 The monopolist charge a higher price in the market with the "more elastic" demand (i.e., the one with a more negative value of e).
What price would be charged for each lampshade : Suppose that there are only two firms (Firm A and Firm B) in the market for decorative lampshades. Let the inverse demand function and the total cost function be given by: How many lampshades would be produced by the entire industry? What price would..

Reviews

Write a Review

Business Economics Questions & Answers

  Compare and contrast monetary and fiscal policies

In this discussion, you will compare and contrast monetary and fiscal policies. Consider two recent national crisis points: 9/11 and the banking failures of 2008. Was fiscal or monetary policy more immediately responsive to each crisis? Why? Was fisc..

  Comparative advantage in the production of cell phones

Which country has comparative advantage in the production of Cell Phones? Which country has comparative advantage in the production on Computers? Explain. If transportation costs are ignored and trade is allowed, will China and Germany engage in trad..

  Design a circuit and arduino program

Expanding on Lab 5a, design a circuit and Arduino program that accomplishes the following: Implements all of the functionality of the Pentatonic Micro Piano.

  What happens to the market when raises the price he charges

Monopolies can sometimes find themselves in difficult financial situations that lead to losses. Suppose Mr. Burns Power Company has a monopoly for providing electricity in Springfield. What happens to the market when Mr. Burns raises the price he cha..

  What is the price elasticity of demand for labor

When the price of wheat rises from $2.34 to $2.46, some farmers switch crops, and the amount of barley offered on the market falls from 101 million bushels to 99 million. What is the cross elasticity of supply? When the wage rate rose from $6.25 per ..

  Require each household to reduce its garbage disposal

The city of Spillsville is worried that its municipal landfill is going to fill up. As a result, the city's sanitation engineer has proposed three solutions: Require each household to reduce its garbage disposal by 100 pounds per month.

  Costs as either variable-fixed or quasi-fixed cost

Jetways Airline flies passengers between New York and Miami, making one round-trip daily using a leased Boeing 737 aircraft. Consider the number of passengers served daily as the output for the airline. Identify each of the following costs as either ..

  Explain how fed use of its three tools of monetary policy

Explain how the Fed's use of its three tools of monetary policy affect supply and demand in the market for reserves and the equilibrium federal funds interest rate.

  What is your estimate of the cost to produce each unit

The following data has been provided by your manufacturing department to estimate the standard cost of producing a particular product. What is your estimate of the cost to produce each unit? If you company wishes to make a 20% of the manufacturing co..

  Described in the fair trade material play an important role

Explain why non-governmental organizations (NGOs) like the cooperatives described in the Fair Trade material play an important role in the economic development of developing countries. Why do the governments of these countries require help to protect..

  Increasing tax revenues during a period of full employment

Which of the following would most likely result if the federal government increased spending without increasing tax revenues during a period of full employment?

  Structural deficit or surplus and cyclical deficit-surplus

If the actual budget deficit is $200 billion, the economy is operating $450 billion above its potential, and the marginal tax rate is 14 percent, what are the structural deficit or surplus and the cyclical deficit or surplus?

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