« 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 150 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?

Vaccines prevent between 2.5 and 4 million deaths every year.

Did you know?

Cancer has been around as long as humankind, but only in the second half of the twentieth century did the number of cancer cases explode.

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

Did you know?

For pediatric patients, intravenous fluids are the most commonly cited products involved in medication errors that are reported to the USP.

Did you know?

Signs and symptoms that may signify an eye tumor include general blurred vision, bulging eye(s), double vision, a sensation of a foreign body in the eye(s), iris defects, limited ability to move the eyelid(s), limited ability to move the eye(s), pain or discomfort in or around the eyes or eyelids, red or pink eyes, white or cloud spots on the eye(s), colored spots on the eyelid(s), swelling around the eyes, swollen eyelid(s), and general vision loss.

Sequential decline of whale catches in the Antarctic shows the strong effect of human predators. Sequential decline of whale catches in the Antarctic shows the strong effect of human predators.
This map shows the percentage of Protestants by state in Germany. When compared to the previous map This map shows the percentage of Protestants by state in Germany. When compared to the previous map
This photo shows a newborn baby minutes after birth. This photo shows a newborn baby minutes after birth.
This label on a Toyota Camry hybrid shows the relative smog-producing emissions, but this does not ... This label on a Toyota Camry hybrid shows the relative smog-producing emissions, but this does not ...
Greet a First-Time Client With a Firm Handshake. Greet a First-Time Client With a Firm Handshake.
A 1000-kg car is slowly picking up speed as it goes around a horizontal unbanked curve whose ... A 1000-kg car is slowly picking up speed as it goes around a horizontal unbanked curve whose ...
Video: Major Elements in Biological Molecules: Proteins

For a complete list of videos, visit our video library