Please do 2.2... starts with \"in an industry with inverse demand curve p= 100-2
ID: 1202848 • Letter: P
Question
Please do 2.2... starts with "in an industry with inverse demand curve p= 100-2Q there are four firms"... PLEASE DO THIS PROBLEM!! READ WHOLE QUESTION, ASKS HOW MUCH EACH FIRM PRODUCES
the mu over marginal cost is greater differentiated. EXERCISES exercise is avai lable on MyEconLab; * = answer appears at th 1. Market Structures 1.1 Which market structure best describes (a) airplane manufacturing, (b) electricians in a small town, (c) farms that grow tomatoes, and (d) cable television in a city? Why? 2. Cartels 2.1 Many retail stores offer to match or beat the price offered by a rival store. Explain why firms that belong to a cartel might make this offer In an industry with inverse demand curve p = 100-2Q there are four firms, each of which has a constant marginal cost given by MC = 20. If the firms form a profit-maximizing cartel and agree to operate subject to the constraint that each firm will produce the same output level, how much does each firm produce? The European Union fined Sotheby's auction house more than 20 million for operating (along with rival auction house Christie's) a price-fixin cartel (see “The Art of Price Fixing" in MyEconLab Chapter Resources, Chapter 14). The two auction houses were jointly setting the commission rate sellers must pay. Let r denote 2.2 2.3 tie's) a price-fixing the jointly set auctionExplanation / Answer
Cartel MC = MR MC = 20 MR = 100 - 4Q 20 = 100 - 4Q 4Q = 100 - 20 Q = 80/4 = 20 Price = 100 - (4*20) = 20 Each firm will produce Q/4 = 20/4 = 5