what would be an example of a homogeneous product in the airline industry?
Homework Answers
There is is no product differentiation in a homogeneous product. Air travel in an all-economy airline is an example of a homogeneous product in the airline industry. There is no differentiation in this category.
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what would be an example of a homogeneous product in the airline
industry?
Give an example of an industry with an oligopolistic structure. What are the main products/services offered...
Give an example of an industry with an oligopolistic structure. What are the main products/services offered by this industry? What are the main firms in the industry? To what extent are the products/services from this industry homogeneous? What is the level of concentration in the industry? How would you characterize the barriers to entry in the industry?
Consider an industry with N identical firms producing a homogeneous product and competing in quantities. The...
Consider an industry with N identical firms producing a homogeneous product and competing in quantities. The demand function is given by Q = α − P and each firm has constant marginal cost c. Two of the firms are planning to merge. If this merger occurs, the industry would then consist of N – 1 identical firms. Would such a merger occur? Comment more generally on the incentives for merger in oligopoly.
Pick an organization within the airline industry that you are familiar with or interested in learning...
Pick an organization within the airline industry that you are familiar with or interested in learning about. Identify an example of when a favorable cost variable would not be good news for the performance of the organization. What department would be responsible for the variance? What would you recommend to correct the variance? Explain your reasoning.
An industry consists of two Cournot firms selling a homogeneous product with a market demand curve...
An industry consists of two Cournot firms selling a homogeneous product with a market demand curve given by P=100-Q1-Q2. Each firm has a marginal cost of $10 per unit. (a) Find the Cournot equilibrium quantities and prices. (b) What is the Bertrand equilibrium price in this market? (c) Find the quantities and price that would prevail if the firms acted as if they were a monopolist (I.e. find the collusive outcome) and then find the equilibrium price and quantity that...
Consider an industry with a homogeneous product where firms set output (or capacity) levels and price...
Consider an industry with a homogeneous product where firms set output (or capacity) levels and price is determinied by total output (or capacity). Suppose there is a large number of potential entrants and that each firm can choose one of two possible technologies, with cost functions Ci = Fi = ciqi (i = 1,2). A. Derive the conditions for a free-entry equilibrium. B. Show, by means of a numerical example, that there can be more than one equilibrium, with different...
with the help of diagrams, what happens if duopolistic companies such as airline industry (company A,...
with the help of diagrams, what happens if duopolistic companies such as airline industry (company A, company B) become a monopolistic company since one of the company collapses (A collapses) ? what would be the new price and outputs strategy for company B? and what would be the consequences on the overall economic welfare in this market?
Consider an industry for a homogeneous product with a single firm (firm 1) that can produce...
Consider an industry for a homogeneous product with a single firm (firm 1) that can produce at zero cost. The demand function in the industry is given by Q-20-P. Now suppose that a second firm (firm 2) considers entry into the industry. Firm 2 can also produce at zero cost. If firm 2 enters, firm 1 and 2 compete by setting quantities. Answer the following four questions. Qi Suppose that Firm 2 enters the market. What are the Stackelberg equilibrium...
Question 2 (20 pts) In an industry there are N firms producing a homogeneous product. Let...
Question 2 (20 pts) In an industry there are N firms producing a homogeneous product. Let qi denote the output level of firm i, and Q denote the aggregate industry production level. That is, QAssume that the demand curve facing the industry is p 100 Q. Suppose that the cost function of each firm i is given by C(g) ifq0 a. Calculate the output and profit levels of each firm in a symmetric equilib- rium. b. What happens to profits...
Consider a homogeneous product industry with inverse demand function p = 36 - 4Q. There are...
Consider a homogeneous product industry with inverse demand function p = 36 - 4Q. There are two identical firms in the market, each of them facing the total cost function C = 12q. (a) Firms compete in prices according to the Bertrand model, find the Bertrand-Nash equilibrium.
Consider a homogeneous product industry with inverse demand function p-35 -Q a) Assume that the industry...
Consider a homogeneous product industry with inverse demand function p-35 -Q a) Assume that the industry is initially monopolized by an incumbent firm (firm I) which has the exclusive right to use the state-of-the-art technology summarized by the total cost function C-10q. Find the initial monopoly equilibrium (price, quantity, industry profit, consumer surplus and total surplus) and the associated degrees of concentration (Herfindahl index) and market power (Lerner index) b) Assume now that a new firm (firm N) discovers and...
Consider an industry for a homogeneous product with a single firm (firm 1) that can produce at zero cost. The demand function in the industry is given by Q-20-P. Now suppose that a second firm (firm 2) considers entry into the industry. Firm 2 can also produce at zero cost. If firm 2 enters, firm 1 and 2 compete by setting quantities. Answer the following four questions. Qi Suppose that Firm 2 enters the market. What are the Stackelberg equilibrium...
Question 2 (20 pts) In an industry there are N firms producing a homogeneous product. Let qi denote the output level of firm i, and Q denote the aggregate industry production level. That is, QAssume that the demand curve facing the industry is p 100 Q. Suppose that the cost function of each firm i is given by C(g) ifq0 a. Calculate the output and profit levels of each firm in a symmetric equilib- rium. b. What happens to profits...
Consider a homogeneous product industry with inverse demand function p-35 -Q a) Assume that the industry is initially monopolized by an incumbent firm (firm I) which has the exclusive right to use the state-of-the-art technology summarized by the total cost function C-10q. Find the initial monopoly equilibrium (price, quantity, industry profit, consumer surplus and total surplus) and the associated degrees of concentration (Herfindahl index) and market power (Lerner index) b) Assume now that a new firm (firm N) discovers and...
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