Compare the optimal solutions obtained in Exercises 2 and 3. Specifically: a. How much higher (lower) is

Question:

Compare the optimal solutions obtained in Exercises 2 and 3. Specifically:

a. How much higher (lower) is the optimal selling price when the two firms form a cartel to maximize industry profits, compared to when they act independently?

b. How much higher (lower) is total industry output?

c. How much higher (lower) are total industry profits?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Managerial economics applications strategy and tactics

ISBN: 978-1439079232

12th Edition

Authors: James r. mcguigan, R. Charles Moyer, frederick h. deb harris

See More Books

Question Posted: Dec 03, 2012 02:26 AM

See More Questions

Firms A and B make up a cartel that monopolizes the market for a scarce natural resource. The firms marginal costs are MCA = 6 + 2QA and MCB = 18 + QB, respectively. The firms seek to maximize the...
Profits (X) in an industry consisting of 100 firms are normally distributed with a mean value of $1.5 million and a standard deviation (s.d.) of $120,000. Calculate a. P(X < $1 million) b. P($800,000...
When other firms in your industry are behaving unethically, how can you buck the trend and position your company to value ethical behavior? Why is that important? Will it damage your companys...
Write a data type Interval that implements the following API: An interval is defined to be the set of all points on the line greater than or equal to min and less than or equal to max. In particular,...
The power expended by a cheetah is 160 kW while running at 110 km/h, but its body temperature cannot exceed 41.0C. If 70.0% of the energy expended is dissipated within its body, how far can it run...
Consider a devaluation that raises EX0 to EX1 and lowers autonomous import expenditures from IM0 to IM1. Draw a graph that shows the impact of these changes on the equilibrium level of output and the...
Which industrial transducer does not require a power supply (selfgenerated signal)?
Multiple-product target profit A&Z Company sells products both domestically and internationally. Fixed costs totaled $5,000,000 last year. In an effort to increase its total sales volume, A&Z plans...
2-Using the CPT data in figure below, a unit weight of 115 pcf, and an overconsolidation ratio of 3, determine (a) soil behavior type (b) o' using Kulhawy and Mayne correlation and (c) N60 for the...
Prove that GRAPH-SEARCH satisfies the graph separation property illustrated in Figure 3.9. Begin by showing that the property holds at the start, then show that if it holds before an iteration of the...
Consider exercise 2. Assume that two companies (A and B) are duopolists who produce identical products. Demand for the products is given by the following linear demand function: P = 200 QA QB Where...
Alchem (L) is the price leader in the polyglue market. All 10 other manufacturers (follower [F] firms) sell polyglue at the same price as Alchem. Alchem allows the other firms to sell as much as they...
The waiting time for customers at MacBurger Restaurants follows a normal distribution with a population standard deviation of 1 minute. At the Warren Road MacBurger, the quality assurance department...
Each land parcel belongs to the first or inner ring, the second ring, the third ring, or beyond. To be clear, the rings are disjoint, so the phrase 'second ring' excludes the first. A district may...
What does alternative media do best when included in a brands promotional mix?
Verify the following trigonometric integral for integer $k$ : \[ \int_{0}^{2 \pi} \sin (x / 2) \cos (k x) d x=\frac{-4}{4 k^{2}-1} . \] Hence find the coefficients $\lambda_{k}$ in the Fourier...
How does mobile employ location-based capabilities?
When should brands employ mobile advertising?
Compute the probabilities for the following situations. These probabilities can be computed analytically, or you may write a computer program to generate the probabilities by simulation. (a) Out of a...
Organizations are increasing their use of personality tests to screen job applicants. What are some of the advantages and disadvantages of this approach? What can managers do to avoid some of the...
Is failure an issue? What are the consequences of failure for you? For your clients? For your part in the health service? Clinical trials are often avoided by clients who may be afraid of becoming...
You want to invest in a hot dog stand near the ballpark. You have a 0.35 probability that you can turn your current $15,000 into $50,000 and a 0.65 probability that fierce competition will drive you...
Tennessee just instituted a state lottery. The initial jackpot is $100,000. If the first week yields no winners, the next weeks jackpot goes up, depending on the number of previous players who placed...
You hold an auction on eBay and expect two bidders to show up. You estimate that each bidder has a value of either $5 or $8 for the item, and you attach probabilities to each value of 50%. Your own...
As you know, the value of. It is defined as the ratio of the circumference of a circle C divided by its diameter 2r. That is x-C/2. a) Let's assume that you measured a circumference of a circle to be...
Figure 3 presents a network where N users are sharing a link of 1 Mbps bandwidth. Users are generating data at a rate of 100 kbps when busy, but are busy generating data only with probability p=0.1....
The big mall near Sally and Amy's city has extended their operating hours to accommodate the huge crowds expected for the After Thanksgiving Sale. In their eagerness to beat the crowd, Sally forgets...

Compare the optimal solutions obtained in Exercises 2 and 3. Specifically: a. How much higher (lower) is

Question:

Step by Step Answer:

Compare Cournot and the Cartel examples Optimal Value Act Independently Form Ca...View the full answer

Managerial economics applications strategy and tactics

Students also viewed these Economics questions