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Exam 12: Oligopoly

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Exam 1: Supply, Demand, Balancing Benefits, Costs, Principles and Preferences11 Questionsadd course
Exam 2: From Demand to Welfare, Constraints, Choices, and Demand14 Questionsadd course
Exam 3: Technology and Production13 Questionsadd course
Exam 4: Cost13 Questionsadd course
Exam 5: Choices Involving Time and Profit Maximization12 Questionsadd course
Exam 6: Behavioral Economics, Choices Involving Strateg and Choices Involving Risk17 Questionsadd course
Exam 7: Equilibrium and Efficiency21 Questionsadd course
Exam 8: Market Intervention17 Questionsadd course
Exam 9: General Equilibrium, Efficiency, and Equity14 Questionsadd course
Exam 10: Monopoly30 Questionsadd course
Exam 11: Pricing Policies39 Questionsadd course
Exam 12: Oligopoly31 Questionsadd course
Exam 13: Externalities and Public Goods17 Questionsadd course
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45 Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is 45 Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is Alice's profit maximizing output? where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is Alice's profit maximizing output?

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Question 1
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C

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup>is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is Kate's profit? where P is the price of a cubic yard of concrete and Qdis the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is Kate's profit?

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Question 2
Correct Answer:
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A

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is Alice's profit? where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is Alice's profit?

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Question 3
Correct Answer:
Verified

B

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. Find Kate's best response function. where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. Find Kate's best response function.

(Multiple Choice)
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Question 4

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is the difference in Alice's profit when Kate enters the market first, compared to when they simultaneously select their outputs? where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is the difference in Alice's profit when Kate enters the market first, compared to when they simultaneously select their outputs?

(Multiple Choice)
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Question 5

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup>is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. How much more profit does a monopolist earn compared to the joint profit each producer earns in the Nash equilibrium? where P is the price of a cubic yard of concrete and Qdis the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. How much more profit does a monopolist earn compared to the joint profit each producer earns in the Nash equilibrium?

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Question 6

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is Alice's inverse residual demand function? where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is Alice's inverse residual demand function?

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Question 7

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is Kate's inverse residual demand function? where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is Kate's inverse residual demand function?

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Question 8

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. Find Alice's best response function. where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. Find Alice's best response function.

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Question 9

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete andQ<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is Kate's marginal revenue function? where P is the price of a cubic yard of concrete andQd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is Kate's marginal revenue function?

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Question 10

Suppose the daily demand for Coke and Pepsi in a small city are given by Suppose the daily demand for Coke and Pepsi in a small city are given by and where Q<sub>C</sub> and Q<sub>P</sub> are the number of cans Coke and Pepsi sell, respectively, in thousands per day. P<sub>C</sub> and P<sub>P</sub> are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can. What is Pepsi's best response function? and Suppose the daily demand for Coke and Pepsi in a small city are given by and where Q<sub>C</sub> and Q<sub>P</sub> are the number of cans Coke and Pepsi sell, respectively, in thousands per day. P<sub>C</sub> and P<sub>P</sub> are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can. What is Pepsi's best response function? where QC and QP are the number of cans Coke and Pepsi sell, respectively, in thousands per day. PC and PP are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can. What is Pepsi's best response function?

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Question 11

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is Alice's marginal revenue function? where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is Alice's marginal revenue function?

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Question 12

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. How much profit does each producer earn in the Nash equilibrium? where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. How much profit does each producer earn in the Nash equilibrium?

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Question 13

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. Given market demand, what is the market price per cubic yard? where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. Given market demand, what is the market price per cubic yard?

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Question 14

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is the difference in the deadweight loss compared to a monopoly in this market? where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is the difference in the deadweight loss compared to a monopoly in this market?

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Question 15

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is total output in the Nash equilibrium? where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is total output in the Nash equilibrium?

(Multiple Choice)
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Question 16

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete andQ<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is the difference in Kate's profit when she enters the market first compared to when Kate and Alice choose their outputs simultaneously? where P is the price of a cubic yard of concrete andQd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is the difference in Kate's profit when she enters the market first compared to when Kate and Alice choose their outputs simultaneously?

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Question 17

Suppose the daily demand for Coke and Pepsi in a small city are given by Suppose the daily demand for Coke and Pepsi in a small city are given by and where Q<sub>C</sub> and Q<sub>P</sub> and QP are the number of cans Coke and Pepsi sell, respectively, in thousands per day. P<sub>C</sub> and P<sub>P</sub> are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can. If P<sub>P</sub> = $0.75, what is Coke's demand function? and Suppose the daily demand for Coke and Pepsi in a small city are given by and where Q<sub>C</sub> and Q<sub>P</sub> and QP are the number of cans Coke and Pepsi sell, respectively, in thousands per day. P<sub>C</sub> and P<sub>P</sub> are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can. If P<sub>P</sub> = $0.75, what is Coke's demand function? where QC and QP and QP are the number of cans Coke and Pepsi sell, respectively, in thousands per day. PC and PP are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can. If PP = $0.75, what is Coke's demand function?

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Question 18

Suppose the daily demand for Coke and Pepsi in a small city are given by Suppose the daily demand for Coke and Pepsi in a small city are given by and where Q<sub>C</sub> and Q<sub>P</sub> are the number of cans Coke and Pepsi sell, respectively, in thousands per day. P<sub>C</sub> and P<sub>P</sub> are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can. What is the Nash equilibrium price for Coke? and Suppose the daily demand for Coke and Pepsi in a small city are given by and where Q<sub>C</sub> and Q<sub>P</sub> are the number of cans Coke and Pepsi sell, respectively, in thousands per day. P<sub>C</sub> and P<sub>P</sub> are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can. What is the Nash equilibrium price for Coke? where QC and QP are the number of cans Coke and Pepsi sell, respectively, in thousands per day. PC and PP are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can. What is the Nash equilibrium price for Coke?

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Question 19

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q<sup>d</sup> is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is the amount of the deadweight loss? where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is the amount of the deadweight loss?

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