Question

Scenario: The market demand for soccer balls in a small town is 2,500 units, and there are two rival sports brands selling soccer balls in this town, Sporty and Go! The products of the two brands are identical Price $100 80 60 40 20 1,000 2,000 3.0DD 112) Refer to the scenario above. The market for Good A in Corinthia is an example of a A) duopoly B) monopolistically competitive market C) perfectly competitive market D) monopoly 113) Refer to the scenario above. If Aqua Inc. charges a price of $70 for each unit of Good A and Blu Corp. charges a price of S50, Blu Corp. will face a demand of units. 113) A) 3,000 B)1,500 C) 2,000 D) 1,000 114) Refer to the scenario above. Each firm will face a demand of units of Good 14) A if both of them charge a price of $60. A) 3,000 B) 1,500 C) 2,000 D) 1,000 115) Refer to the scenario above. If Aqua Inc. charges a price of $20 for each unit of Good 15) A and Blu Corp. charges a price of $60, Blu Corp. will A) face a demand of 2,000 units B) face a demand of 1,500 units C) face the entire market demand D) lose all its customers to Aqua Inc 23 116) Refer to the scenario above. If the marginal cost of producing the last unit of the good 116) is $40, a Nash equilibrium will occur when both firms charge a price of__ A) $70 B) S40 C) $60 D) $20

Answer 1

This is the case of duopoly which is a situation of a market in which there are two producers of a product, either perfectly identical or almost identical. They are not bound by the agreement regarding price or quantity of production.

112) Option A - this is an example of duopoly market

113) Option A - 3000. It Aqua increases its prices by any amount and blucorp reduces the prices by any amount, the entire market demand will fall towards blucorp.

114) Option C - if aqua charges a price of 20 which is less than 60, blucorp will lose all its customers to aqua until the time it has its prices greater than 20.

only supposed to answer 4 in one go