Managerial Economic Analysis Fall 2020 HW PROBLEM #1 Suppose that there are 13 consumers in the...

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Managerial Economic Analysis Fall 2020 HW PROBLEM #1 Suppose that there are 13 consumers in the market. Each consumer is willing to buy at most one unit of the product. The reservation prices ($) of consumers are given here. Consumer ID A B C D E F G H I Reserv. Price 16 11 14 4 10 13 7 12 6 There are three plants in the market. The reservation prices of the different units (or the $ cost) at the different plants are given in the following table. Unit Reserv. Price ($) of unit in Plant #1 2 123456 4 5 10 11 13 Reserv. Price ($) of unit in Plant #2 3 6 8 14 16 18 J K L M 15 8 9 5 Reserv. Price (S) of unit in Plant #3 7 9 12 15 17 19 Unit Reserv. Price ($) of unit in Plant #1 2 4 5 10 11 13 123456 3 6 Reserv. Price ($) of unit in Plant #2 3 6 8 14 16 18 Reserv. Price ($) of unit in Plant #3 7 9 12 15 17 19 Question #1 Assume a full information competitive behavior of all agents in the market. Also assume that each plant is independently owned and independently controlled to maximize the profit of its owner. 1. Calculate the market clearing price. 2. How many units will be consumed? 3. Who are the producers of these units? 4. What is the profit earned by each producer? 5. Are they equal? why not? Managerial Economic Analysis Fall 2020 HW PROBLEM #1 Suppose that there are 13 consumers in the market. Each consumer is willing to buy at most one unit of the product. The reservation prices ($) of consumers are given here. Consumer ID A B C D E F G H I Reserv. Price 16 11 14 4 10 13 7 12 6 There are three plants in the market. The reservation prices of the different units (or the $ cost) at the different plants are given in the following table. Unit Reserv. Price ($) of unit in Plant #1 2 123456 4 5 10 11 13 Reserv. Price ($) of unit in Plant #2 3 6 8 14 16 18 J K L M 15 8 9 5 Reserv. Price (S) of unit in Plant #3 7 9 12 15 17 19 Unit Reserv. Price ($) of unit in Plant #1 2 4 5 10 11 13 123456 3 6 Reserv. Price ($) of unit in Plant #2 3 6 8 14 16 18 Reserv. Price ($) of unit in Plant #3 7 9 12 15 17 19 Question #1 Assume a full information competitive behavior of all agents in the market. Also assume that each plant is independently owned and independently controlled to maximize the profit of its owner. 1. Calculate the market clearing price. 2. How many units will be consumed? 3. Who are the producers of these units? 4. What is the profit earned by each producer? 5. Are they equal? why not?

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ANSWER 1 To calculate the market clearing price we need to determine the highest price at which the quantity demanded equals the quantity supplied We ... View the full answer