An oligopoly market's monthly demand is given by the equation: Q = 3,840 – 0.8 P. In creating a cartel, the four oligopolists agree to the following market shares: Firm a: 35%, Firm b: 20%, Firm c: 30%, and Firm d: 15%. They also agree to charge the same price. Their respective Total Costs functions are:
Firm a T.C. = 600,000 + 0.75 Q2
Firm b T.C. = 300,000 + 0.75 Q2
Firm c T.C. = 500,000+ 0.75 Q2
Firm d T.C. = 180,000 + 0.75 Q2
Please show your work clearly in answering the following questions:
An oligopoly market's monthly demand is given by the equation: Q = 3,840 – 0.8 P....
Mays and McCovey are beer-brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and equals $0.80 per can. Assume that neither firm had any startup costs, so marginal cost equals average total cost (ATC) for each firm. Suppose that Mays and McCovey form a cartel, and the firms divide the output evenly. (Note: This is only for convenience; nothing in this model requires that the two companies must...
Mays and McCovey are beer-brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and equals $0.80 per can. Assume that neither firm had any startup costs, so marginal cost equals average total cost (ATC) for each firm. Suppose that Mays and McCovey form a cartel, and the firms divide the output evenly. (Note: This is only for convenience; nothing in this model requires that the two companies must...
Mays and McCovey are beer-brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and equals $1.20 per can. Assume that neither firm had any startup costs, so marginal cost equals average total cost (ATC) for each firm. Suppose that Mays and McCovey form a cartel, and the firms divide the output evenly. (Note: This is only for convenience; nothing in this model requires that the two companies must...
Mays and McCovey are beer-brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and is $0.40 per can. Assume that neither firm had any startup costs. That is, marginal cost equals average total cost (ATC) for each firm. Suppose that Mays and McCovey form a cartel, and the firms divide the output evenly. (Note: This is only for convenience, because nothing in the model requires that the two...
2. Deviating from the collusive outcome Mays and McCovey are beer-brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and equals $0.80 per can. Assume that neither firm had any startup costs, so marginal cost equals average total cost (ATC) for each firm. Suppose that Mays and McCovey form a cartel, and the firms divide the output evenly. (Note: This is only for convenience; nothing in this model requires...
Consider a market with demand function D(p)=10-p and firms with constant marginal cost MC=1. Assume that there is no fixed cost and thus C(q1)=q1and C(q2)=q2 2. Suppose the owners of the two firms meet together secretly and agree to form a cartel. They choose a total level of production that maximizes their joint profits. They agree to split production and thus profits) equally (a) Suppose that both firms abide by their secret agreement. How much will each firm produce? What...
. Consider a market with four firms in a cartel agreement which explicitly colludes to set a price by collectively restricting market output. The inverse market demand is P-1000-5 Q, and each firm has total costs of C(Q)-7000 +40 Q. (27 points) a) Determine the equilibrium price and quantity in the market. b) Calculate the output each individual firm will produce. c) Calculate the profits each firm will earn. Suppose one firm decides to unilaterally increase output by ten while...
Assume the market for cell phones is an oligopoly. Further assume that cell phone consumption and production generate no negative externalities. Imagine that all the companies in the oligopoly agree to collude and charge a single price for their cell phones. Which of the following is true? Choose one A. This agreement is in the best interest of society because the price of cell phones will be higher than if there · B. This agreement is in the best interest...
2. Deviating from the collusive outcome Mays and McCovey are beer-brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and equals $0.80 per can. Assume that neither firm had any startup costs, so marginal cost equals average total cost (ATC) for each firm. Suppose that Mays and McCovey form a cartel, and the firms divide the output evenly. (Note: This is only for convenience: nothing in this model requires...
Mays and McCovey are beer-brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and equals $1.20 per can. Assume that neither firm had any startup costs, so marginal cost equals average total cost (ATC) for each firm.Suppose that Mays and McCovey form a cartel, and the firms divide the output evenly. (Note: This is only for convenience; nothing in this model requires that the two companies must...