If all the firms in a competitive industry were joined into a single firm, what would determine that firm
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Given: Market Demand Curve: Q=100-2P and Industry/ Firm Cost Function: TC=2q
Assumptions:1. These are only 2 firms in the industry.2. If the firm are competitive (or seemingly competitive), theyequally share the industry output.3. If the firms collude, they exercise equal market power (theyequally share the industry output)
Solve for the profit maximizing industry and firm output, price andfirm profits under:a. Quasi-competitive marketb. Cartel Modelc. Cournot Model
Suppose the lawn-mowing industry approximates a perfectly competitive industry. Suppose also that a single firm buys all the assets of the lawn-mowing firms and establishes a monopoly. Contrast these two market structures with respect to price, output, and allocation of resources. Would you expect the monopoly to survive? Explain.
Ā