Why firm incurs no fixed costs but has constant marginal

Assignment Help Econometrics
Reference no: EM13233037

Suppose that two firms compete in quantities (Cournot) in a market in which demand is described by P = 260 - 2Q. Each firm incurs no fixed costs but has a constant marginal cost of 20.
Suppose that after the cartel is established, one firm decides to cheat on the collusion, assuming that the other rm will continue to produce its half of the monopoly output.
a. Given the deviating firm's assumption, how much will it produce?
b. If the deviating firm's assumption is correct, what will be the industry price and the deviating firm's profit in this case?

Reference no: EM13233037

Questions Cloud

What is the output of this code sequence? : What is the output of this code sequence?
Compute the equilibrium partial pressure of bromine gas : 1.70 atm of I2 and 1.30 atm of Br2 are loaded into an evacuated container. The following reaction takes place with Kp = 117.6 Calculate the equilibrium partial pressure of bromine gas. No approximations can be made because the equilibrium constant..
Explains how hackers can hide their own ip address : Explains how hackers can hide their own IP address when attacking other computers, and how administrators can thwart this type of cracking
Explain what is the ph during the titration : What is the pH during the titration of 25.00mL of 0.10M NH3 (Kb = 1.8 x 10-5) after the addition of 10.00mL of 0.10M HCl titrant?
Why firm incurs no fixed costs but has constant marginal : Suppose that two firms compete in quantities (Cournot) in a market in which demand is described by P = 260 - 2Q. Each firm incurs no fixed costs but has a constant marginal cost of 20. Suppose that after the cartel is established, one firm decides ..
Define the amoeba and paramecium : What structures in Amoeba and Paramecium also occur in plantcells, Which do not occur in plant cells, How does shape and body consistency differ between amoeba and paramecium
Explain a radioisotope source containing : Dr. Brown has a radioisotope source containing 1.2 x 106 (also written as 1.2E+06) atoms of Plutonium-238 in 1985, how many atoms will remain in 352 years
Explain what a buffer overflow is how it can be used : Explain what a buffer overflow is, how it can be used by an attacker, and how to prevent such as an attack.
What is the one-period nash equilibrium market price : Suppose that two firms compete in quantities (Cournot) in a market in which demand is described by P = 260 - 2Q. Each firm incurs no fixed costs but has a constant marginal cost of 20. a. What is the one-period Nash equilibrium market price

Reviews

Write a Review

Econometrics Questions & Answers

  How much principal and interest would bank receive

1. If your bank held 3% of the units issued by a unit trust and the mortgages in the trust repaid $15,000,000 in interest and $2,300,000 in principal in its first year, how much principal and interest would your bank receive that year

  Estimate the percent of alumni in favor of the program

A small private university is planning to start a volunteer football program. a random sample of alumni is surveyed. it was found that 250 were in favor of this program, 75 were opposed and 25 had no opinion. a. estimate the percent of alumni in fa..

  Calculate the average cost of producing

Does the firm have constant, increasing, or decreasing returns to scale? Why? If wages are $20,000 per person per operating period and capital units for $3,000 per unit per operating period, calculate the average cost of producing 12,000 units and..

  What is the probability january theory could occur by chance

According to the "January theory," if the stock market is up for the month of January, it will be up for the year. If it is down in January, it will be down for the year. According to an article in The Wall Street Journal, this theory held for 24 ..

  How to use the pw method and marr

A new truck can be purchase for $84,000. Its expected useful life is six years, at wich time market value will be zero. Annual receipts less expenses will approximatetely $18,000 per year over the six-year study period. Use the PW method and MARR ..

  How many car-rental days must jims have a month to breakeven

Jim's Car Rental has fixed costs of $220,000 per month and variable costs per car rented per day of $3. If Jim's charges $25 per day to rent a car, how many car-rental days (the number of cars rented times the number of days each is rented) must J..

  Determining greatest present value

Suppose that you have just been employed as a consultant to help a company decide which of 3-options to take to maximize the value of the company over the next three years.

  What other variables would be important to sell the machines

Unit Sales Price Personal Advertising Selling Expenses 132 $74 $1,140 203 74 1,400 217 55 1,160 255 53 1,210 252 64 1,490 239 70 1,460 152 75 1,200 197 58 1,020 230 65 1,390 154 61 1,040 As a first step in the analysis, the company ran simple regr..

  Determine the useful life infinite interest rate

a city has decided to build a softball complex and the city council has already voted to fund the project at the level of $800,000 (initial capital investment) the city engineer has collected the following financial information for the complex pro..

  Do best estimate for morningsides cost of equity

tax-exempt debt currently requires an interest rate of 6.2percent and its target capitalstructure call for 60 percent debt financing and 40 percent equity(fund capital) financing The estimate cost ofequity for selected invester-owned health care c..

  What amount would the two transactions added

Assume that a grower of flower bulbs sells its annual output of bulbs to an Internet retailer for $80,000. The retailer, in turn, brings in $125,000 from selling the bulbs directly to final customers. What amount would these two transactions added..

  Is demand elastic or inelastic over the price range

Danny "Dimes" Donahue is a neighborhood's 9-year old entrepreneur. His most recent venture is selling homemade brownies that he bakes himself. At a price of $1.50 each, he sells 100. At a price of $1.00 each, he sells 300.

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