A small town is served by many competing supermarkets, which all have the same constant marginal cost.
Homework Answers
Ans)
Consumer surplus falls.
The market quantity decreases.
Total surplus falls.
Since the supermarkets merge to form a single firm and act as a monopolist, the total surplus falls as the consumer surplus declines producer surplus increases and because of the presence of deadweight loss.
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A small town is served by many competing supermarkets, which all have the same constant marginal...
A small town is served by many competing supermarkets, which all have the same constant marginal...
A small town is served by many competing supermarkets, which all have the same constant marginal cost.
Use the black point (plus symbol) to show the competitive price and quantity in this market. Then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus.
Now suppose that the independent supermarkets combine into one chain.
Use the black point...
A small town is served by many competing supermarkets, which have constant marginal cost. a Using...
A small town is served by many competing supermarkets, which have constant marginal cost. a Using a diagram of the market for groceries, show the consumer surplus, producer surplus and total surplus. Now suppose that the independent supermarkets combine to form one chain. Using a new diagram, show the new consumer surplus, producer surplus and total surplus. Relative to the competitive market, what is the transfer from consumers to producers? What is the deadweight loss? b
2. A small town is served by many competing supermarkets, which have the same constant marginal cost. a. Using a diagram of the market for groceries, show the consumer surplus, producer surplus,...
2. A small town is served by many competing supermarkets, which have the same constant marginal cost. a. Using a diagram of the market for groceries, show the consumer surplus, producer surplus, and total surplus. b. Now suppose that the independent super- markets combine into one chain. Using a new diagram, show the new consumer surplus, producer surplus, and total surplus. Relative to the competitive market, what is the transfer from consumers to producers? What is the deadweight loss?
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A small town is served by many competing supermarkets, which all have the same constant marginal cost.
Use the black point (plus symbol) to show the competitive price and quantity in this market. Then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus.
Now suppose that the independent supermarkets combine into one chain.
Use the black point...
A small town is served by many competing supermarkets, which have constant marginal cost. a Using a diagram of the market for groceries, show the consumer surplus, producer surplus and total surplus. Now suppose that the independent supermarkets combine to form one chain. Using a new diagram, show the new consumer surplus, producer surplus and total surplus. Relative to the competitive market, what is the transfer from consumers to producers? What is the deadweight loss? b
2. A small town is served by many competing supermarkets, which have the same constant marginal cost. a. Using a diagram of the market for groceries, show the consumer surplus, producer surplus, and total surplus. b. Now suppose that the independent super- markets combine into one chain. Using a new diagram, show the new consumer surplus, producer surplus, and total surplus. Relative to the competitive market, what is the transfer from consumers to producers? What is the deadweight loss?
2....
2- There are 100 supermarkets in a competitive market in Springfield. They all have a constant marginal cost of $1000 per unit of output. Demand for supermarket output by Springfield citizens can be represented by (when P > 0) P Q = 100,000 (16 1000 e. Assume that Bart is planning to buy all the supermarkets and to start his own chain as BartBarn. Given that BartBarn will have the monopoly power over the Springfield market, explain how the equilibrium...
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