In Question 3.1, now suppose that each firm has fixed costs, F, of 300. Merging would imply that the monopoly firm would pay fixed costs of 300. How would your answer change?
Answer to relevant QuestionsA maker of specialty soaps supplies a unique soap made from a cactus extract to the only two retailers in a small town. The producer sells the soap to the retailers at the marginal cost of production of the soap, $ 1 per ...Suppose that the inverse demand curve for paper is p = 200 – Q, the private marginal cost (unregulated competitive market supply) is MCp = 80 + Q, and the marginal external harm from emissions is MCx = Q. Determine the ...Are broadcast television and cable television public goods? Is exclusion possible? If either is a public good why is it privately provided? Woz Enterprises specializes in electrical components. The market for one particular component is perfectly competitive and in long-run equilibrium. Marginal cost is constant at 30. Woz can develop a much cheaper process for ...Suppose that one euro can be exchanged for 1.3 U.S. dollars and that one U.S. dollar can be exchanged for 80 Japanese yen. If these currencies can be traded freely with low transaction costs, what exchange rate would you ...
Post your question