Demand and supply, Business Economics

Assignment Help:

Star Petroleum and Moonlight Petroleum are retail petrol stations that compete in the local market to sell petrol to consumers. Star and Moonlight are located across the street from one another and can observe the prices posted on each other's price display boards. Demand for petrol in this market is Q = 50 - 10P and both petrol stations obtain petrol from their supplier at $1.25 per litre. On the day that both petrol stations opened for business each owner was observed changing the price of petrol advertised on its display board more than 10 times; the owner of Star Petroleum lowered its price to slightly undercut Moonlight's price, and the owner of Moonlight lowered its price to beat Star's price. Since then, prices appear to have stabilized.

a. Under current conditions, how many litres of petrol are sold in the market, and at what price? Explain.

b. Would your answer differ if Star Petroleum had service attendants available to fill consumers' tanks but Moonlight was only a self-service station? Explain.


Related Discussions:- Demand and supply

Average and standard deviation of monthly return, Report the average and st...

Report the average and standard deviation of monthly return for your corporation and the S&P 500 on the spreadsheet.  Use the spreadsheet functions to calculate these: =AVERAGE(dat

Salary Negotiation, The following represents the potential outcomes of your...

The following represents the potential outcomes of your first salary negotiation after graduation: Assuming this is a sequential move game with the employer moving first, indicate

Assignment, #question.During the 1990s, technological advance reduced the c...

#question.During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use supply and demand diagrams, how the following markets are affected in t

What are the problems of environment in economic growth, What are the probl...

What are the problems of Environment in Economic Growth? Environment Problem: Economic growth can damage the environment by: • Negative externalities as an example waste thr

The effectiveness of the floating exchange rate model, QUESTION (a) Dif...

QUESTION (a) Differentiate between the fixed and floating exchange rate models. (b) Discuss the effectiveness of the floating exchange rate model. (c) Explain the mechani

How could quality culture behaviours be applied in hospital, How could the ...

How could the quality culture behaviours be applied in a hospital? The total quality management approach and culture are extremely readily applied to a hospital. Usually, peopl

Type of project management require to deliver to volunteer, What kind of pr...

What kind of project management would you require to deliver to have people volunteer to work on your projects? The leadership challenge is to suppose that everyone working ont

Why do state approaches work into promoting development, Why do state appro...

Why do state approaches work into promoting development? State planning and intervention is desirable due to the shortcomings of markets. The approaches range of state through

What are implications of sustainability in economic growth, What are the im...

What are the implications of the sustainability in economic growth? Implications of the sustainability in economic growth: Moving in the direction of sustainable development

Write Your Message!

Captcha
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