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- The following graph depicts the costs incurred by a Local egg seller, Rahim. Rahim is faced with strong competitors who are selling exactly the same product. Use the graph to answer the following questions- Price/Cost per egg MC 12 ATC 8 MR3 AVC 6. MR2 MR1 Quantity 100 200 300 400 a)At what price will Rahim try to minimize loss by selling eggs in the market? b)At what price will there be a break-even point?The global pandemic 2020 has promoted a race to capture the market for introducing effective vaccine and treatments. a. If PFIZER is the sole vaccine provider given the following information, answer the questions below: Output Price/Unit Total Cost 1 5500 1000 2 5000 1200 3 4500 1500 4 4000 2500 5 3500 4000 6 3000 5700 7 2500 7500 8 2000 9400 9 1500 11400 10 1000 13500 Given the tabular information above find the profit-maximizing output and price also illustrate the same using the two-dimensional labeled diagram. Show the calculation as well. b. Assume if many firms enter into the business of providing vaccine determine: How the demand curve of PFIZER would change and how it would now maximize its profit? The kind of market structure now PFIZER…Price $14 $12 $10 58 $6 $4 $2 $0 B(2, 9.75) 1 2 3 A(4,9.3) 4 MR 5 Quantity F(6, 6.5) C(8, 3.5) AC MC D 6 7 8 9 2. Graph the Kinked demand curve of the uncooperative oligopolist. a) Identify the point of tacit collusion b) why do firms never follow a price increase but always follow a price decline and label curve(s) that represent that behavior c) Label the Nash Equilibrium d) why does the oligopolist always gravitate back to the point of tacit collusion?
- You own Athleticon, which manufactures athletic wear. Your new contract with Atlanta United, a professional soccer team, allows Athleticon to be the sole suppler of athletic wear with the “Atlanta United” logo. No one lese can manufacture athletic wear with the “Atlanta United” logo. What do you think will be Athleticon’s level of profitability on the sale of “Atlanta United” athletic wear? Explain why. Your contract with Atlanta United only lasts 3 years. It was not renewed. Other firms can now manufacture athletic wear with the “Atlanta United” logo It is now 5 years after your contract with Atlanta United was terminated. Any manufacturer that wants to can manufacture and sell athletic wear with the “Atlanta United” logo. What do you think will be the level of profitability and rate of return on manufacturing athletic wear with the “Atlanta United” logo? Explain why.The following graph depicts the costs incurred by a Local egg seller, Rahim. Rahim is faced with strong competitors who are selling exactly the same product. Use the graph to answer the following questions- Price/Cost per egg MC 12 ATC MR3 AVC MR2 MR1 Quantity 100 200 300 400 a)lf the market price per egg is 8tk, in order to maximize profit how many eggs does Rahim sell? b)lf the price stays at 8tk, what happens in the long run? choose from the following options. option 1: Rahim stops selling eggs. option 2 : New firms enter into the egg market option 3: all existing sellers suffer from an economic loss. c)lf the price falls down to 3tk price, which of the following option does Rahim have in short run? option1: Temporarily shutting down the business business option 2 : staying in generating no profit option 3: indifferent between staying in and going Out of the market. butA computer hardware firm sells both laptop computers and printers. Through the magic oft focus groups, their pricing team determines that they have an equal number of three types of customers, and that these customers' reservation prices are as illustrated in the figure below. Laptop Printer Bundle Customer A Customer B Customer C $750 $1,000 $100 $150 $850 $1,150 $650 Se00 S50 Assume for simplicity the marginal cost of production for laptops and printers is zero. in total? If the firm were to charge only individual prices (not use the bundle price), what prices should it set for its laptops and printers to maximize profil? Assuming for simplicity that the firm has only one customers of each type, how much does it earm To maximize profit using individual prices, the firm should charge a price for laptops of p=0 and a price for printers of (Enter your responses as whole numbers.) In tum, profit isx=$. (Enter your response as a whole number.) After conducting a costly study, an outside…
- Answer using diagram below, there are 100 identical firms in the industry. nit 1 2 3 4 5 6 7 8 9 10 8 1213 A market price of $5... mc ATC AVC G ThousandsAjax Cleaning Products is a medium-sized firm operating in an industry dominated by one large firm—Tile King. Ajax produces a multiheaded tunnel wall scrubber that is similar to a model produced by Tile King. Ajax decides to charge the same price as Tile King to avoid the possibility of a price war. The pnce charged by Tile King is $20,000. Ajax has the following short-run cost curve: TC=800,0005,000Q+100Q2 Compute the marginal cost curve for Ajax. Given Ajaxs pricing strategy, what is the marginal venue function for Ajax? Compute the profit-maximizing level of output for Ajax. Compute Ajaxs total dollar profits.Total Output 1 2 3 4 5 6 7 8 9 10 Price $ 100 90 80 70 60 50 40 30 20 10 Marginal Average Revenue $ 100 80 60 40 20 0 -20 -40 -60 -80 Total Cost $ 100.00 63.00 52.67 49.50 49.60 50.00 52.29 55.75 60.67 67.60 Marginal Cost $ 30 26 32 40 50 52 66 80 100 130 Refer to the data for a nondiscriminating monopolist. At its profit-maximizing output, this firm's total profit will be
- Consider a quantity-setting duopoly. The two firms are Alpha, Ltd. and Beta, Inc. The demand schedulein this market is:p Qd180 150155 175130 200Each firm has a constant marginal cost of 30 per unit. Suppose each firm can choose to produce either 75units or 100 units. Firms make their quantity choices simultaneously and the market price is whatever itneeds to be to sell the total output in the market.(a) Draw up the normal form game matrix, showing the players, strategies, and payoffs. Show your workdetermining the profits in each box in the matrix.(b) Determine the Nash equilibrium of this game.(c) Suppose the firms were able to come to an agreement to make more profit. What would this agreementbe?(d) Explain how the government might respond to such an agreement and whyConsider a quantity-setting duopoly. The two firms are Alpha, Ltd. and Beta, Inc. The demand schedulein this market is: p Qd180 150155 175130 200Each firm has a constant marginal cost of 30 per unit. Suppose each firm can choose to produce either 75units or 100 units. Firms make their quantity choices simultaneously and the market price is whatever itneeds to be to sell the total output in the market.(a) Draw up the normal form game matrix, showing the players, strategies, and payoffs. Show your workdetermining the profits in each box in the matrix.(b) Determine the Nash equilibrium of this game.(c) Suppose the firms were able to come to an agreement to make more profit. What would this agreementbe?(d) Explain how the government might respond to such an agreement and why.A6 In Changlun, Kedah, there are two bakers, Abu and Bakar. Their bread taste the same and nobody can tell the difference. Abu has constant marginal costs of RM1 per loaf of bread. Bakar has constant marginal costs of RM2 per loaf. Fixed costs are zero for both of them. The inverse demand function for bread in Changlun is p(q) = 6 – 0.01(qA + qB), where q is the total number of loaves sold per day. Find the reaction function for Abu and Bakar. What is the Cournot Nash equilibrium number of loaves of bread for each baker?
