Question: The demand function for price increases and for price cuts for an oligopolist are, respectively, Q 1 = 210 - 30P 1 or P 1

The demand function for price increases and for price cuts for an oligopolist are, respectively,

Q1= 210 - 30P1or P1= 7 - Q1/30

Q2= 90 - 10P2or P2= 9 - Q2/10

The oligopolist's total cost function is: TC = 3.5Q + Q2/60

(a) Derive the MR1, MR2, and MC functions facing the oligopolist.

(b) Determine the price and output at the kink on the demand curve.

(c) Determine the upper and lower limit of the MR gap and prove that MC falls in the MR gap.

(d) Find the value of the total profits of the oligopolist.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q:

can someone answer question 2 for me? thank you APPENDIX PROBLEMS 1. Given Q = 9 - P. find (a) the reaction functions of duopolists A and B. (b) the Cournot equilibrium, and (c) the price 2. The...

Q:

The demand function for price increases and for price cuts for an oligopolist are, respectively, Q = 210-30P1 or P = 7 - Q/30 Q2 90-10P2 or P = 9 - Q2/10 The oligopolist's total cost function is: TC...

Q:

4. Suppose that the demand function for price increases for the firm in Problem 6 (text page 455) shifts to Q* = 150 - 30P. (a) Draw a figure showing the best level of output, price, and profits per...

Q:

We have discussed that multi-plant monopolist and cartel that acts like a monopoly. Assume that monopolist is operating with two plants. Can you superimpose the equilibrium price and quantity...

Q:

7. Solve Problem 2 (text page 464) again on the assumption that the demand function that the cartel faces increases to Q' = 150 - 10P **Including screenshots of problem 2 for reference because it is...

Q:

In order to answer these questions, you will need to read Chapter 9: " Market Equilibrium & Product Price - Imperfect Competition Question #1: Explain the 3 types of "Imperfect" market structures...

Q:

4 Files 3:17 PM Fri May 13 Insert Draw Layout Review View Unit SMacroeconomic Policy Name: HR: POLICY BASICS Use the space below to take notes during class. The Federal Reserve: Monetary Policy:...

Q:

4 Files 3:18 PM Fri May '13 Insert Draw Layout Review View Unit SMacroeconomic Policy Name: HR: FISCAL POLICY Use the space below to take notes during class. Disposable Income: How does a change in...

Q:

303Micro, help. 6. A firm in a competitive output market is unsure of what the ultimate product price will be at the time she has to make her output decision. She believes that with probability .5...

Q:

1 of25 If government regulations significantly increase the cost of operating within a particular market, one result is that new firms are discouraged from entering the market. barriers to entry are...

Q:

In each of the following piece-wise functions: (i) Sketch the graph of the given function, (ii) Express f(t) in terms of the unit step function u(t)= u(t-c) where and (iii) find the Laplace transform...

Q:

John Brown is a self-employed architect. He purchased a house in the outer suburbs of Melbourne in July 2016. He purchased the property because it had a room which he could modify and use to conduct...

Q:

The calculation of diluted earnings per share assumes that stock options were exercised and that the proceeds were used to buy freasury stock at the: Multiple Choice purchase price stated on the...

Q:

Using the data in BE4-12, identify the accounts that would be included in a post-closing trial balance.

Q:

Erin Company recently changed its system of internal control over cash disbursements. The system includes the following features. 1. Instead of being unnumbered and manually prepared, all checks must...

Q:

Fetter Company is a very profitable small business. It has not, however, given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum,...

Q:

Your roommate asks your help on the following questions about CVP analysis formulas. (a) How can the mathematical equation for break-even sales show both sales units and sales dollars? (b) How do the...

Q:

Overhead variances, ethics Zeller Company uses standard costing. The company prepared its static budget for 2008 at 2,500,000 machine-hours for the year. Total budgeted overhead cost is $31,250,000....

Q:

Problem 3-5 (Algo) The following table contains the number of complaints received in a department store for the first 6 months of operation: (Round final answer to a whole number.) MONTH January...

Q:

5. What do you think is meant by the phrase giving priority to what we already know?

Q:

2. You are asked to provide information to the board of the company you work for. How would you convey this information if the aim is: a) That they will remember the information for a long time. b)...

Q:

7. Give examples of information-overload from your everyday life. Review the six consequences that information-overload can lead to and discuss the examples in relation to all the six points.