« previous next »

Author Question: The figure above shows the market demand curve for a market with three firms. It also shows a firm's ... (Read 69 times)

ghost!

  • Hero Member
  • *****
  • Posts: 560
on: Jun 29, 2018
The figure above shows the market demand curve for a market with three firms. It also shows a firm's marginal cost curve. In this oligopoly, what is the range of output and prices? Why does this range of outcomes exist?
 
  What will be an ideal response?

Question 2

Refer to the figure above. The loss in consumer surplus due to the imposition of the tax is given by the areas ________.
 
  A) JBIE and BIA
  B) EAG AND GHF
  C) CAE AND EAHF
  D) JBHF AND ABH


Brenm

  • Sr. Member
  • ****
  • Posts: 359
Reply #1 on: Jun 29, 2018
Answer to Question 1

If the firms operate as a monopoly, they produce a total of 200 units per day and set a price of 12 per unit. If the firms compete and operate as perfect competitors, they produce 400 units per day and the price is 4 per unit. The range of possible outcomes exists because firms in oligopoly have the choice of colluding to decrease output to monopoly levels or cheating on the cartel and increase output to its efficient level. A range of prices also exists between the monopoly price and the perfectly competitive price.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Adult head lice are gray, about ? inch long, and often have a tiny dot on their backs. A female can lay between 50 and 150 eggs within the several weeks that she is alive. They feed on human blood.

Did you know?

The average adult has about 21 square feet of skin.

Did you know?

Your skin wrinkles if you stay in the bathtub a long time because the outermost layer of skin (which consists of dead keratin) swells when it absorbs water. It is tightly attached to the skin below it, so it compensates for the increased area by wrinkling. This happens to the hands and feet because they have the thickest layer of dead keratin cells.

Did you know?

Nearly all drugs pass into human breast milk. How often a drug is taken influences the amount of drug that will pass into the milk. Medications taken 30 to 60 minutes before breastfeeding are likely to be at peak blood levels when the baby is nursing.

Did you know?

Prostaglandins were first isolated from human semen in Sweden in the 1930s. They were so named because the researcher thought that they came from the prostate gland. In fact, prostaglandins exist and are synthesized in almost every cell of the body.

The age-dependent curve of salivary progresterone levels in three populations. The age-dependent curve of salivary progresterone levels in three populations.
This January 1937 photo from Sneedville, Tennessee, shows Eunice Johns, age 9, and her husband, ... This January 1937 photo from Sneedville, Tennessee, shows Eunice Johns, age 9, and her husband, ...
Mobilize joints of the feet and ankle. Apply scissoring to metatarsals and figure-8s to toes. Dorsi- ... Mobilize joints of the feet and ankle. Apply scissoring to metatarsals and figure-8s to toes. Dorsi- ...
The slope of the curve y = ax^3 - bx^2 + cx - 3 at x = 2 is 5. If the point of inflection of the cur The slope of the curve y = ax^3 - bx^2 + cx - 3 at x = 2 is 5. If the point of inflection of the cur
Find the factor demand for labour and the amount of output it will produce. Show all ... Find the factor demand for labour and the amount of output it will produce. Show all ...
A comparison of a trait (height) that shows discontinuous and continuous phenotypes in different pla A comparison of a trait (height) that shows discontinuous and continuous phenotypes in different pla
Video: Oxygen - hemoglobin dissociation curve & Hemoglobin's affinity with oxygen - acidity

For a complete list of videos, visit our video library