There are two firms in the blastopheme industry.The demand curve for blastophemes is given by p = 4,200 -3q.Each firm has one manufacturing plant and each firm i has a cost function C(qi)=q2i,where qi is the output of firm i.The two firms form a cartel and arrange to split total industry profits equally.Under this cartel arrangement,they will maximize joint profits if

A) they produce a total of 600 units,no matter which firm produces them. B) they produce a total of 466.67 units,no matter which firm produces them. C) and only if they each produce a total of 700 units. D) and only if each firm produces of 300 units in its plant. E) they shut down one of the two plants,having the other operate as a monopoly and splitting the profits. A) they produce a total of 600 units,no matter which firm produces them. B) they produce a total of 466.67 units,no matter which firm produces them. C) and only if they each produce a total of 700 units. D) and only if each firm produces of 300 units in its plant. E) they shut down one of the two plants,having the other operate as a monopoly and splitting the profits.

The demand for y is given by y=256/p2.Only two firms produce y.They have identical costs c(y)= y2.If they agree to collude and maximize their joint profits,how much output will each firm produce?

A) 2 B) 5 C) 10 D) 12 E) 16 A) 2 B) 5 C) 10 D) 12 E) 16

Exam 28:Oligopoly-Part A

There are two major producers of corncob pipes in the world,both located in Herman,Missouri.Suppose that the inverse demand function for corncob pipes is described by p = 160 - 3q,where q is total industry output,and marginal costs are zero.What is the Cournot reaction function of firm 1 to the output,q₂,of firm 2?

(Multiple Choice)

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Question 21

A certain type of mushroom used to be produced on 50 farms,each of which had a cost function c(y)=y₂ + 1,where y $\gt$ 0 and c(0)= 0.The firms operated as competitors.The demand curve for this kind of mushroom is given by D(p)=52 - p.Marauding deviant Ninja turtles invaded many of the mushroom farms leaving absolute devastation and loathsome slime in their wake.(The turtles had no effect on the cost functions of farms that were not invaded. )

(Multiple Choice)

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Question 22

An industry has two firms-a Stackelberg leader and a follower.The price of the industry output is given by P = 36 - Q,where Q is the total output of the two firms.The follower has a marginal cost of $0.The leader has a marginal cost of $9.How much should the leader produce in order to maximize profits?

(Multiple Choice)

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Question 23

Roach Motors is the dominant used-car dealer in a small Midwestern city.After paying $50,000 for overhead,Roach Motors' cost per car is $500.There are 5 other small used-car lots in this town,but since they are not large enough to purchase cars through the same discount sources as Roach,each firm faces the cost function C =5,000 + 700Q +5Q².The demand for used cars is Q =500 +P₁/10.Assuming Roach is aware of its competitors' costs,what price should Roach set for a used car?

(Multiple Choice)

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Question 24

A city has two major league baseball teams,A and B.The number of tickets sold by either team depends on the price of the team's own tickets and the price of the other team's tickets.If team A charges P_a for its tickets and team B charges P_b for its tickets,then ticket sales,measured in hundreds of thousands per season,are 10 -2P_a + P_b for team A and 5 +P_a - 2P_b for team B.The marginal cost of an extra spectator is zero for both teams.Each team believes the other's price is independent of its own choice of price,and each team sets its own price so as to maximize its revenue.What price do they charge per ticket?

(Multiple Choice)

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Question 25

A Stackelberg leader will necessarily make at least as much profit as he would if he acted as a Cournot oligopolist.

(True/False)

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Question 26

In Cournot equilibrium each firm chooses the quantity that maximizes its own profits assuming that the firm's rival will continue to sell at the same price as before.

(True/False)

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Question 27

Suppose that Grinch and Grubb go into the wine business in a small country where wine is difficult to grow.The demand for wine is given by p= $300 - .2Q,where p is the price and Q is the total quantity sold.The industry consists of just the two Cournot duopolists,Grinch and Grubb.Imports are prohibited.Grinch has constant marginal costs of $45 and Grubb has marginal costs of $30.How much is Grinch's output in equilibrium?

(Multiple Choice)

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Question 28

A duopoly faces the inverse demand curve p=160 -2q.Both firms in the industry have constant costs of $10 per unit of output.In a Cournot equilibrium how much output will each duopolist sell?

(Multiple Choice)

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Question 29

North Bend currently has one McDonald's fast-food franchise.Demand for hamburgers in North Bend is given by Q =300 - 10P.Any McDonald's franchise has costs of C =70 +2Q for producing Q hamburgers.If a second McDonald's franchise were to move into North Bend (and both behaved as duopolists),the profit of the original McDonald's would fall from

(Multiple Choice)

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Question 30

Ann and Bruce each own a pizza store in Frostbite Falls,Minnesota.Demand for pizza is given by Q = 400 2 40P.Having the only two pizza stores in Frostbite Falls,they attempt to profitably split the market without violating the Sherman Antitrust Act.Each has the cost function C =50 +2Q.If Ann and Bruce behave as duopolists,each earns a profit of

(Multiple Choice)

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Question 31

An industry has two firms each of which produces output at a constant unit cost of $10 per unit.The demand function for the industry is q =1,000,000/p.The Cournot equilibrium price for this industry is

(Multiple Choice)

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Question 32

An industry has two firms.Firm 1's cost function is c(y)=2y + 500 and firm 2's cost function is c(y)=2y + 400.The demand curve for the output of this industry is a downward-sloping straight line.In a Cournot equilibrium,where both firms produce positive amounts of output,

(Multiple Choice)

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Question 33

North Bend currently has one McDonald's fast-food franchise.Demand for hamburgers in North Bend is given by Q =400 -10P.Any McDonald's franchise has costs of C = 60 + 3Q for producing Q hamburgers.If a second McDonald's franchise were to move into North Bend (and both behaved as duopolists),the profit of the original McDonald's would fall from

(Multiple Choice)

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Question 34

The cartel of copper exporting countries is called COPEC.As part of an international marketing agreement,the United States has agreed to buy all the copper that COPEC wants to sell the United States at a constant price of $100 per ton.COPEC also sells copper in Europe at a price of $150 per ton.COPEC acts just like a monopolist.If COPEC finds it profitable to sell in the United States at $100 per ton and simultaneously to sell in Europe for $150 a ton,what is the price elasticity of demand of COPEC's copper in the European market? (Hint: What is COPEC's marginal revenue in the U.S.market?)

(Multiple Choice)

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Question 35

A city has two major league baseball teams,A and B.The number of tickets sold by either team depends on the price of the team's own tickets and the price of the other team's tickets.If team A charges P_a for its tickets and team B charges P_b for its tickets,then ticket sales,measured in hundreds of thousands per season,are 10 -2P_a +P_b for team A and 20 +P_a - 2P_b for team B.The marginal cost of an extra spectator is zero for both teams.Each team believes the other's price is independent of its own choice of price,and each team sets its own price so as to maximize its revenue.What price do they charge per ticket?

(Multiple Choice)

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Question 36

There are two firms in the blastopheme industry.The demand curve for blastophemes is given by p = 4,200 -3q.Each firm has one manufacturing plant and each firm i has a cost function C(q_i)=q²i,where q_i is the output of firm i.The two firms form a cartel and arrange to split total industry profits equally.Under this cartel arrangement,they will maximize joint profits if

(Multiple Choice)

4.9/5

(75)

Question 37

The demand for y is given by y=256/p².Only two firms produce y.They have identical costs c(y)= y².If they agree to collude and maximize their joint profits,how much output will each firm produce?

(Multiple Choice)

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Question 38

In Bertrand competition between two firms,each firm believes that if it changes its output,the rival firm will change its output by the same amount.

(True/False)

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Question 39

Suppose that Grinch and Grubb go into the wine business in a small country where wine is difficult to grow.The demand for wine is given by p = $480 -.2Q,where p is the price and Q is the total quantity sold.The industry consists of just the two Cournot duopolists,Grinch and Grubb.Imports are prohibited.Grinch has constant marginal costs of $30 and Grubb has marginal costs of $60.How much is Grinch's output in equilibrium?

(Multiple Choice)

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Question 40

Showing 21 - 40 of 55

Exam 28:Oligopoly-Part A

A Stackelberg leader will necessarily make at least as much profit as he would if he acted as a Cournot oligopolist.

In Cournot equilibrium each firm chooses the quantity that maximizes its own profits assuming that the firm's rival will continue to sell at the same price as before.

A duopoly faces the inverse demand curve p=160 -2q.Both firms in the industry have constant costs of $10 per unit of output.In a Cournot equilibrium how much output will each duopolist sell?

An industry has two firms each of which produces output at a constant unit cost of $10 per unit.The demand function for the industry is q =1,000,000/p.The Cournot equilibrium price for this industry is

An industry has two firms.Firm 1's cost function is c(y)=2y + 500 and firm 2's cost function is c(y)=2y + 400.The demand curve for the output of this industry is a downward-sloping straight line.In a Cournot equilibrium,where both firms produce positive amounts of output,

The demand for y is given by y=256/p2.Only two firms produce y.They have identical costs c(y)= y2.If they agree to collude and maximize their joint profits,how much output will each firm produce?

In Bertrand competition between two firms,each firm believes that if it changes its output,the rival firm will change its output by the same amount.

Demand-Part A

Revealed Preference-Part A

Revealed Preference-Part B

Slutsky Equation-Part A

Slutsky Equation-Part B

Buying and Selling-Part A

Buying and Selling-Part B

Intertemporal Choice-Part A

Intertemporal Choice-Part B

Asset Markets-Part A

Asset Markets-Part B

Uncertainty-Part A

Uncertainty-Part B

Risky Assets-Part A

Risky Assets-Part B

Consumers Surplus-Part A

Consumers Surplus-Part B

Market Demand-Part A

Market Demand-Part B

Equilibrium-Part A

Equilibrium-Part B

Auctions-Part A

Auctions-Part B

Technology-Part A

Technology-Part B

Profit Maximization-Part A

Profit Maximization-Part B

Cost Minimization-Part A

Cost Minimization-Part B

Cost Curves-Part A

Cost Curves-Part B

Firm Supply-Part A

Firm Supply-Part B

Industry Supply-Part A

Industry Supply-Part B

Monopoly-Part A

Monopoly-Part B

Monopoly Behavior-Part A

Monopoly Behavior-Part B

Factor Markets-Part A

Factor Markets-Part B

Oligopoly-Part B

Game Theory-Part A

Game Theory-Part B

Game Applications-Part A

Game Applications-Part B

Behavioral Economics-Part A

Exchange-Part A

Exchange-Part B

Production-Part A

Production-Part B

Welfare-Part A

Welfare-Part B

Externalities-Part A

Externalities-Part B

Information Technology-Part A

Information Technology-Part B

Public Goods-Part A

Public Goods-Part B

Asymmetric Information-Part A

Asymmetric Information-Part B

Filters

The demand for y is given by y=256/p².Only two firms produce y.They have identical costs c(y)= y².If they agree to collude and maximize their joint profits,how much output will each firm produce?