This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Which of the following correctly identifies characteristics of land and capital? A) Land and ... (Read 36 times)

michelleunicorn

  • Hero Member
  • *****
  • Posts: 565
on: Jun 29, 2018
Which of the following correctly identifies characteristics of land and capital?
 
  A) Land and capital can both be rented and owned.
  B) Land is rented, whereas capital is owned.
  C) Land can be owned or rented, whereas capital can only be owned by a firm.
  D) Capital can be owned or rented by a firm, whereas land can only be owned by a firm.

Question 2

There are three leading manufacturers of smart phones in Techland. Their products are considered to be perfect substitutes.
 
  a) Will these firms earn zero economic profits in the long run? Explain your answer.
  b) What can the firms do to earn maximum profit?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

joewallace

  • Sr. Member
  • ****
  • Posts: 337
Reply #1 on: Jun 29, 2018
Answer to Question 1

A

Answer to Question 2

a) The market for smart phones in Techland is an example of an oligopoly with homogeneous products. Firms in an oligopoly with homogeneous products often enter into a price war to increase their market share. Each firm cuts its price slightly below its rival's price to capture a larger market share. Because their goods are perfect substitutes, the price-cutting firm faces the entire market demand. This continues as long as the rival's price exceeds marginal cost. In equilibrium, all the firms charge a price equal to marginal cost and earn zero economic profits.

b) The firms can enter into a collusive agreement and decide to set prices jointly. They can coordinate and act like a monopoly. In this case, each firm will charge a price equal to that charged by a monopolist. At this price, each firm will face one-third of the market demand and earn one-third of the total profit earned by a monopolist.


michelleunicorn

  • Member
  • Posts: 565
Reply 2 on: Jun 29, 2018
Excellent

frankwu0507

  • Member
  • Posts: 322
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Did you know?

Historic treatments for rheumatoid arthritis have included gold salts, acupuncture, a diet consisting of apples or rhubarb, nutmeg, nettles, bee venom, bracelets made of copper, prayer, rest, tooth extractions, fasting, honey, vitamins, insulin, snow collected on Christmas, magnets, and electric convulsion therapy.

Did you know?

Patients should never assume they are being given the appropriate drugs. They should make sure they know which drugs are being prescribed, and always double-check that the drugs received match the prescription.

Did you know?

Hip fractures are the most serious consequences of osteoporosis. The incidence of hip fractures increases with each decade among patients in their 60s to patients in their 90s for both women and men of all populations. Men and women older than 80 years of age show the highest incidence of hip fractures.

Seven characteristics are common to all life Seven characteristics are common to all life
Spider-characteristics Spider-characteristics
The Land Ordinance of 1785 called for surveying and dividing the Western Territories into square mil The Land Ordinance of 1785 called for surveying and dividing the Western Territories into square mil
Who Gets Executed? Gender Bias in Capital Punishment Who Gets Executed? Gender Bias in Capital Punishment
Characteristics of NREM and REM sleep Characteristics of NREM and REM sleep
Representative pedigrees for two characteristics, each followed through three generations Representative pedigrees for two characteristics, each followed through three generations
Video: Stress and Immune System Animation

For a complete list of videos, visit our video library