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Globo Public Supply has $1,000,000 in assets. Its demand curve is: P= 206 - .20 * Q and its total cost function is: TC = 20,000 + 6 * Q where TC excludes the cost of capital. If Globo Public Supply is UNREGULATED, find Globos optimal price.

A. $206

B. $107

c. $56

D. $6

e. $3

A monopolist faces tge follownig demand curve: P= 12- .3Q with marginal costs of $3. What is the monopolistic price?

a. P=$5.50

B. P=$6.50

c. P=$7.50

d. P=$8.50

e. P=$9.50

A monopoly will always produce less than a purely competitive industry, ceteris paribus.

a. true

b. false

The demand curve facing the firm in _____ is the same as teh industry demand curve.

a. pure competition

b. monopolistic competition

c. oligopoly

d. pure monopoly

e. none of the above

Suppose that in a perfectly competitive industry the equilibirum industry quantity is 10,000 units. Suppose that the monopoly output is 5,000. For a 2 firm Cournot Oliopoly (N=2) known as a duopoly, what is a likely Cournot QUANTITY for the industry?

a. 3000 units

b. 5000 units

c. 6667 units

d. 10000 units

e. 15000 units

A manufacturer produces two types of computer softwware, Word processing (W) and spreadsheet (S), which is offered to two different retail outlets (#1 and #2). The following table shows the max price each retail outlet is willing to pay for each individual software product.

Retail #1 Product W $170 Product S $105

Retail #2 Product W $95 Product S $135

What is the optimal pricing strategy that will maximizerevenue for the manufacturer, given the maximum the retail outlets are willing to pay?

a. budnel both products (W and S) and sell them at $230

b. price product w at $170 and product s at $135

c. price product w at $170 and product s at $170

d. price product w at $95 and product s at $105

e. bundle both products (w and S) and sell them at $275

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1 Jun 2019

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Related questions

Globo Public Supply has $1,000,000 in assets. Its demand curve is: P= 206 - .20 * Q and its total cost function is: TC = 20,000 + 6 * Q where TC excludes the cost of capital. If Globo Public Supply is UNREGULATED, find Globos optimal price.

A. $206

B. $107

c. $56

D. $6

e. $3

A monopolist faces tge follownig demand curve: P= 12- .3Q with marginal costs of $3. What is the monopolistic price?

a. P=$5.50

B. P=$6.50

c. P=$7.50

d. P=$8.50

e. P=$9.50

A monopoly will always produce less than a purely competitive industry, ceteris paribus.

a. true

b. false

The demand curve facing the firm in _____ is the same as teh industry demand curve.

a. pure competition

b. monopolistic competition

c. oligopoly

d. pure monopoly

e. none of the above

Suppose that in a perfectly competitive industry the equilibirum industry quantity is 10,000 units. Suppose that the monopoly output is 5,000. For a 2 firm Cournot Oliopoly (N=2) known as a duopoly, what is a likely Cournot QUANTITY for the industry?

a. 3000 units

b. 5000 units

c. 6667 units

d. 10000 units

e. 15000 units

A manufacturer produces two types of computer softwware, Word processing (W) and spreadsheet (S), which is offered to two different retail outlets (#1 and #2). The following table shows the max price each retail outlet is willing to pay for each individual software product.

Retail #1 Product W $170 Product S $105

Retail #2 Product W $95 Product S $135

What is the optimal pricing strategy that will maximizerevenue for the manufacturer, given the maximum the retail outlets are willing to pay?

a. budnel both products (W and S) and sell them at $230

b. price product w at $170 and product s at $135

c. price product w at $170 and product s at $170

d. price product w at $95 and product s at $105

e. bundle both products (w and S) and sell them at $275

A. A competitive firm

  1. can consider only its location in setting the price.
  2. must base its competitive price on product differentiation.
  3. has the ability to set its own price.
  4. must accept the price determined by the intersection of the market supply and demand curves.
  5. has no supply curve.

B. If a firm is making an economic profit, then

  1. the factors of production are being paid their opportunity costs.
  2. there will be no change in the number of firms if the industry is perfectly competitive.
  3. the factors of production are being paid less than their opportunity costs.
  4. the factors of production are being paid more than their opportunity costs.
  5. the firm will exit the industry

C. Along a downward-sloping monopoly demand curve,

  1. marginal revenue is greater than price.
  2. the elasticity of demand is constant.
  3. marginal revenue decreases when the price decreases.
  4. marginal revenue is equal to zero when the price is equal to zero

D. If, in the short run, a perfectly competitive firm is producing at a point where the total cost is greater than total revenue, then the firm should

  1. shut down because economic profits are negative.
  2. continue to produce as long as P > AVC.
  3. continue to produce because accounting profits are positive.
  4. set a higher price for its output.
  5. set a lower price for its output

E. For a perfectly competitive firm, the demand curve is

  1. the marginal revenue curve.
  2. perfectly inelastic.
  3. always equal to marginal cost.
  4. the same as the market demand curve

F. A firm in a(n) industry will have the most elastic demand curve

  1. monopolistic
  2. oligopolistic
  3. monopolistically competitive
  4. perfectly competitive

G. If the demand curve of a monopolist is in the inelastic range, then

  1. total revenue will fall if the price increases.
  2. total revenue will be unchanged if the price increases.
  3. total revenue will rise if the price increases.
  4. the total supply will increase by an equal amount if demand increases.
  5. the price will be unchanged if total revenue increases

H. Monopolistic competition and oligopoly are examples of

  1. monopoly.
  2. perfect competition.
  3. theories of consumer behavior.
  4. imperfect competition.
  5. the extreme cases on the market structure continuum

I. Under which market structure do firms face the flattest (most elastic) demand curve?

  1. perfect competition
  2. monopolistic competition
  3. oligopoly
  4. monopoly

J. At the point of long-run equilibrium for a perfectly competitive firm,

  1. economic profits are zero.
  2. TR > TC.
  3. TR < TC.
  4. P = AVC.
  5. normal profits are zero.

Cournot Equilibrium

The dancing mcahine industry is a duopoly. The two firms, Chuckie B corp and Gene Gene Dancing Machines, compete through Cournot quantity-setting competition. The demand curve for the industry is P = 120-Q, where Q is the total quantity produced by Chuckie B and Gene Gene. Currently, each firm has marginal cost of $60 and not fixed cost.

First question is What is the equilibirum price, quantity, and profit for each firm? I got price:$80, Quantity (each):20, and Profit:$400.00

Part B is where I am struggling

Chuckie B corp. is considering implementing a proprietary technology with a one-time sunk cost of $200. Once this investment is made, marginal cost will be reduced to $40. Gene Gene has no access to this or any other cost saving technology, and its marginal cost will remain at $60. SHould CHuckie B invest in the new technology? (hint: you must compute another cournot equilibrium)

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