5 sell a product that is homogeneous (except for its location of sale) and of which each consumer purchases exactly one unit. Firms 1 and 2 face constant marginal costs c₁ = =0 and c₂ == 2, and choose prices p1 and p2. A consumer at location x who buys from firm i incurs a total expenditure of +25(0,- x)2. Consumers seek to minimize expenditure and firms to maximize profits. Find the equilibrium price of firm 1, p.
Q: For the cash flows given below, determine the value of G that makes the present worth in year 0…
A: A cash flow series is a sequence of cash flows over a while, typically related to a project,…
Q: What role do interest rates play in consumer spending and savings, and how do central banks use…
A: An interest rate is charged on the borrowing money by consumers. It is charged by the lender of the…
Q: The following report is the amount of various currencies on December 31, 2015 owned by Jordan…
A: The purchase price refers to the price which is paid by the customer for the goods or services.…
Q: 1. Suppose there is a mutual fund and each consumer buys a share in it for her endowment at t = 0.…
A: Given,
Q: Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they…
A: The production function is described as The production function for Hannah and Sam is The wage is…
Q: Assume that the long-run level of output is Y = 1000, which the economy is also at initially in the…
A: IS curve is a part of IS-LM model. It is the general equilibrium of the economy where Aggregate…
Q: "What is the basic economic problem of scarcity?"
A: The essential monetary issue of shortage alludes to the crucial issue that assets (like time, cash,…
Q: Which of the following movements would be consistent with the government budget going from deficit…
A: The market for loanable funds (LF) consists of;savers: those who supply funds. It can include…
Q: Answer the following questions for the price-demand equation. p+0.002x=50 (A) Express the demand x…
A: This law states that all else being equal, as the price(P) of a service or item decreases, the…
Q: Suppose that the production function for Hannah and Sam's home remodeling business is Q…
A: The production function for Hannah is The production function for Sam is The wage rate is $8000 per…
Q: Production Possibility Frontier
A: The Production Possibility Frontier (PPF) is a graphical representation of the combination of goods…
Q: Assume the market for Monday matinee movie tickets is a perfectly competitive market. Suppose a…
A: The perfectly competititve market deals with many sellers and many buyers. They sells identical…
Q: Question 3 What has been the average annual growth rate of U.S. real GDP per person over the 120…
A: America (or Country A) is the world's first democracy, with its fundamental values stated in the…
Q: Government spending 50 Profit Social Security contributions 20 Indirect business taxes Corporate…
A: Gross domestic product is the summation of a country's final goods and services. The increase in GDP…
Q: Labour Hrs/day Output Units/day AP MP TFC 450 11.84 120 41 500 16.67 A perfectly competitive firm…
A: Total production shows the total output that can be produced given the inputs. Average product is…
Q: 6.* This question is concerned with the repercussion effects of a domestic expansion once we…
A: Domestic expansion signifies the growth or expansion of an economy through the business sector…
Q: 550 19 132 186 236 54 26.57 33.71 Refer to Table 9.1. If the market price is $42, then for this firm…
A: A perfectly competitive firm charges same price for all units of product it sells. Therefore, a…
Q: Price P* B Supply Demand Q* Quantity In the market depicted above in Figure 3, the total consumer…
A: Consumer surplus may be defined as the price that the customer is willing to pay and the actual…
Q: Give an example of a 10 year plan and do all the components of the 10 year plan please show your…
A: The objective of this question is to create a 10-year financial plan that includes projected income,…
Q: 6. Suppose nominal GDP decreased by 1.5%. Over that year, the GDP deflator increased by 1.0%. From…
A: Real GDP is the macroeconomic indicator of the total economic output. The overall output is adjusted…
Q: Table 6-4 The following table contains the demand schedule and supply schedule for a market for a…
A: The price, quantity demanded and supplied is provided below.PriceQuantity demandedQuantity…
Q: Question: Which of the following is a characteristic of a perfectly competitive market? A) High…
A: A perfectly competitive model refers to a market situation at which there are many buyers and…
Q: Answer the question on the basis of this table showing the marginal benefit that a particular public…
A: The extra advantage or satisfaction a consumer gets from purchasing one more unit of an item or…
Q: A special-purpose 30-horsepower electric motor has an efficiency of 90%. Its purchase and…
A: Present worth, also known as present value, is a financial concept used to evaluate the current…
Q: One of the concerns of economists and policy makers is the share of the labor factor in the total…
A: Given,
Q: If the marginal propensity to consume is 0.50, how much would government spending have to rise to…
A: The marginal propensity to consume refers to the portion of each additional income earned a consumer…
Q: (a) Derive the first-order conditions and show the solution is a c(w, T), n(w, T). pair of functions
A: The link between tax rates and government revenue is depicted in economics by the Laffer Curve. At…
Q: Assume shoes must be purchased in integer quantities. RuPaul and Priyanka are performers. The table…
A: Every consumer has a maximum price that the consumer is willing to pay for a product. In the…
Q: Give an example of a 1 year plan and do all the components of the 1 year plan please show your work…
A: The objective of this question is to create a comprehensive one-year financial plan that includes…
Q: 4. Consider the job market signaling game given the figure below. The worker has two types: H and L,…
A: 4. A signaling game can have two types of equilibrium;Pooling equilibriumSeparating equilibriumIn…
Q: **Practice** suppose that many insurance companies sell contracts of the following format:- The…
A: e. None of the options aboveExplanation:To find the actuarially fair premium, we need to calculate…
Q: Suppose that one year ago the Government in Mexico has announced to keep the par value of the Peso…
A: To uphold the value of the Peso against the US Dollar within a 3% band of the par value, fixed at 5…
Q: How do changes in the interest rates set by a central bank influence the exchange rates between…
A: National banks change financing costs as a component of their money-related strategy to control…
Q: Which economic challenge— unemployment, poverty, inflation, or one you feel is more of a…
A: The issue is to determine which financial test — joblessness, neediness, expansion, or an elective…
Q: What are the effects of a country's currency depreciation on its import and export activities?
A: Money deterioration is the point at which the worth of a country's cash falls compared to different…
Q: The quest for a universal $15.00 minimum wage is a topic of much current discussion and…
A: Minimum wage refers to the lowest wage level an employer pays an employee for an hour. It is the…
Q: MR MC ATC $6 AVC $5 $4 $3 y* Based on this graph if the Average Revenue is 7.50, and the optimal…
A: Average total cost refers to the approximate total cost of production at different levels of…
Q: Refer to Table III. Which quantity of output is the profit-maximizing level? Table III Quantity…
A: Total revenue is an important financial indicator that gives a quick overview of a business's…
Q: 1.Draw the extensive form representation of this game. 2. Find a subgame perfect equilibrium (SPE)…
A: Given,In the first stage,In the second stage,
Q: 15. Which of the following statements about the 'Stag Hunt' game is true? (a) The pure strategy Nash…
A: The Stag Hunt game alludes to a two-player game where every player can decide or choose to hunt a…
Q: Refer to Exhibit 2-2. If PPF 2 is the relevant production possibilities frontier, then illustrates…
A: The Production Possibility Frontier is denoted by the graphical representation of the two similar…
Q: 16. Refer to Figure 9-2. Without trade, producer surplus amounts to Oa. $1,620. Ob. $810. Oc.…
A: It refers to the gap between the price(P) producers are ready to accept for a service or item and…
Q: Suppose that National Bank of Guerneville has $33 million in checkable deposits, Commonwealth Bank…
A: The money retained by a bank over the minimum reserves needed by regulatory bodies is referred to as…
Q: 3. An industrial coal-fired boiler for process steam is equipped with a 10-year-old electrostatic…
A: The present worth of a project or investment refers to its value at present based on the associated…
Q: Summarize what has happened to the incidence of poverty since 1960, and determine when and why the…
A: ***Since the student has posted multiple questions, the expert is required to solve only the first…
Q: Question 39 Consider the graph below. Which of the following occurrences will shift the supply of…
A: The supply of bonds in financial markets refers to the aggregate sum of bonds that are accessible…
Q: a. In the country of Estanbalu, there are plans to cease international trade. You are assigned asan…
A: The notions of exchange and specialization are key in economics, illustrating the advantages of…
Q: A farmer’s fields are right next to the train tracks, where sparks from the trains set the field on…
A: The socially optimal level of consumption or production is the level at which the marginal benefit…
Q: By how much has the following US money aggregates grown between January 2018 (i.e. the month-end…
A: Money aggregates refer to classifications of different types of money and financial assets within an…
Q: Refer to Exercise #30. If John waits until he is 35 to start investing for his retirement, then he…
A: The given information in the question is as follows:John is 28 years old and plans to retire at…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Suppose you are an analyst for the Coca-Cola Company. An individuals' inverse demand for Coca-Cola is estimated to be P = 98- 4Q (in cents). If Coca-Cola is produced according to the following cost function C(Q)= 1,000+ 2Q (in cents), compute the optimal price and the number of cans to sell as a single package. O $1200 per package and 12 cans O $11.52 per package and 12 cans O $15 per package and 16.67 cans O $12 per package and 24 cansProblem 3 Consider a market with two firms. Each firm is located at one end of a line with lenght one. There is a mass one of consumers. The location of each consumer is given by 0 < x < 1 which is uniformly distributed (with density 1). Firms have no cost of production and set price simultaneously. a) Derive the demand for each firm by identifying the location of the indifferent con-sumer for each price pair. Assume that all consumers know about both products. b) Consider again that consumers can only buy after receiving an ad. Suppose there is an avdertising company that offers the firms to coordinate the targeting of their ads. The company suggests to inform all consumers with a location between 0 and 0.4 the product of the firm at location 0 and to all consumers between 0.6 and 1 the product of the firm at location 1. Determine the optimal prices for both firms if they accept this offer. What are the resulting profits? ( please solve question b only)Consider a market with two firms. Each firm is located at one end of a line with lenght one. There is a mass one of consumers. The location of each consumer is given by 0 < x < 1 which is uniformly distributed (with density 1). Firms have no cost of production and set price simultaneously. a) Derive the demand for each firm by identifying the location of the indifferent consumer for each price pair. Assume that all consumers know about both products. b) Write down the profit functions and calculate the Nash equilibrium prices for both firms. c) Assume that consumers only know the product if they have received and ad. Suppose that ads are not targeted and each firm reaches any consumer with probability 0.5 with her ad. Calculate the size of the different consumer segments. Determine the resulting demand and the new Nash equilibirum prices of the firms. d) Suppose that the ads are costless. When do the firms make larger profits? With fully informed consuemers b) or with imperfect…
- Consider a market with two firms. Each firm is located at one end of a line with lenght one. There is a mass one of consumers. The location of each consumer is given by 0 < x < 1 which is uniformly distributed (with density 1). Firms have no cost of production and set price simultaneously. a) Derive the demand for each firm by identifying the location of the indifferent consumer for each price pair. Assume that all consumers know about both products. b) Consider again that consumers can only buy after receiving an ad. Suppose there is an avdertising company that offers the firms to coordinate the targeting of their ads. The company suggests to inform all consumers with a location between 0 and 0.4 the product of the firm at location 0 and to all consumers between 0.6 and 1 the product of the firm at location 1. Determine the optimal prices for both firms if they accept this offer. What are the resulting profits?Consider a market with two firms. Each firm is located at one end of a line with lenght one. There is a mass one of consumers. The location of each consumer is given by 0 < x < 1 which is uniformly distributed (with density 1). Firms have no cost of production and set price simultaneously.a) Derive the demand for each firm by identifying the location of the indifferent con- sumer for each price pair. Assume that all consumers know about both products.b) Write down the profit functions and calculate the Nash equilibrium prices for both firms.c) Assume that consumers only know the product if they have received and ad. Suppose that ads are not targeted and each firm reaches any consumer with probability 0.5 with her ad. Calculate the size of the different consumer segments. Determine the resulting demand and the new Nash equilibirum prices of the firms.d) Suppose that the ads are costless. When do the firms make larger profits? With fully informed consuemers b) or with imperfect ads…Consider a market with two firms. Each firm is located at one end of a line with lenght one. There is a mass one of consumers. The location of each consumer is given by 0 < x < 1 which is uniformly distributed (with density 1). Firms have no cost of production and set price simultaneously. a) Derive the demand for each firm by identifying the location of the indifferent con- sumer for each price pair. Assume that all consumers know about both products.
- Consider a market with two firms. Each firm is located at one end of a line with lenght one. There is a mass one of consumers. The location of each consumer is given by 0 < x < 1 which is uniformly distributed (with density 1). Firms have no cost of production and set price simultaneously. a) Derive the demand for each firm by identifying the location of the indifferent con- sumer for each price pair. Assume that all consumers know about both products. b) Write down the profit functions and calculate the Nash equilibrium prices for both firms. c) Assume that consumers only know the product if they have received and ad. Suppose that ads are not targeted and each firm reaches any consumer with probability 0.5 with her ad. Calculate the size of the different consumer segments. Determine the resulting demand and the new Nash equilibirum prices of the firms. d) Suppose that the ads are costless. When do the firms make larger profits? With fully informed consuemers b) or with imperfect…Consider two firms that produce the same product and sell it in a market with the following demand function: d(p) = max{0, 12 − p}, where p ≥ 0 is the unit price of the good. Suppose that, for technological reasons, firm 1 can produce either 4 units of output at the total cost of 10, or 6 units at the total cost of 15. Similarly, firm 2 can produce either 3 units of output at the total cost of 8, or 4 units at the total cost of 10. Assume that the firms make their production decisions simultaneously. Characterize the players’ strategy sets. Write down this game in the normal and extensive forms. Find all (if any) Nash equilibria of the game. Now assume that firm 1 makes its decision first. Firm 2 decides how much to produce after it observes firm 1’s output. Characterize the players’ strategy sets. Write down this game in the normal and extensive forms. Find all (if any) Nash equilibria of the game.per pair You are the CEO of a company that advises clients on pricing strategies. Bilbo Baggins is a profit maximizing client who produces uniquely styled shoes and hires you for pricing advice. The graph shows the demand and marginal revenue (MR) curves faced by Bilbo's company for two different groups of consumers. Assume Bilbo can prevent the reselling of his shoes, faces constant marginal cost (MC) equal to $20/pair, can identify varying consumer groups, and has no fixed costs (so, MC ATC). Use the graph to answer the questions. = Price $100 90 80 70 60 50 40 B What price should Bilbo charge? He should charge the more elastic group $60/pair and the less elastic group $70/pair. 30 30 20 10 10 MR 2 Demand 2 He should shutdown in the short run because price is not greater than fixed costs. 0 100 200 300 40C He should price discriminate and produce where P = MC and charge $20/pair. He should produce where MR = MC and charge $70/pair.
- The demand for a new computer game can be modeled by p(x) = 43-4 In x, for 0sxS800, where p(x) is the price consumers will pay, in dollars, and x is the number of games sold, in thousands. Recall that total revenue is given by R(x) =x•p(x). Complete parts (a) through (c) below. a) Find R(x). R(x) = b) Find the marginal revenue, R'(x). R'(x) =O c) How many units will be sold if the price that consumers are willing to pay is $40? The number of units that will be sold is (Round to the nearest whole number as needed.)Nick is planning on starting a mobile pizza oven. He is expecting his customers to spend $20 per pizza. It is estimated that the costs associated with the ingredients will be $5 per pizza. In addition, his fixed costs for renting the mobile oven is $150 per day. 1) How many pizzas does Nick need to sell to break-even per day? 2) If Nick wants to make a profit of $300 and sell 25 pizzas per day, calculate the price he should charge per pizza. 3) If Nick increases the price per pizza to the amount found in part (b) then explain the effect on the break-even number of pizzas sold. Assume the fixed costs and the variable costs remain unchanged. Do not re-calculate the break-even quantity, x, for this question however you may quote the break-even formula and contribution margin to aid your explanation.you are an accountant for a manufacterer of radios. the demand function for the tablets is p= 40-4x2 where x is the number of tablets produced in millions. it costs the company $15 to make a tablet. write an equation for the manufactures profit as a function of the number of tablets produced. the company currently produces 1 million tablets and makes a profit of $21000000, but you would like to scale up production a bit, what greater number of tablets could the company produce to yield the same profit