« previous next »

Author Question: The above figure shows the reaction functions for two pizza shops in a small isolated town. Compare ... (Read 224 times)

crobinson2013

  • Hero Member
  • *****
  • Posts: 535
on: Jul 1, 2018
The above figure shows the reaction functions for two pizza shops in a small isolated town. Compare the Cournot, Stackelberg, cartel, and competitive equilibria in terms of total output and welfare.
 
  What will be an ideal response?

Question 2

Why do patents stimulate research?
 
  A) Patents give firms time to do research.
  B) Patents give firms the opportunity to recover research costs and thus a profit motive.
  C) Firms would research as much even without patents.
  D) Patents don't stimulate research.
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


otokexnaru

  • Sr. Member
  • ****
  • Posts: 314
Reply #1 on: Jul 1, 2018
Answer to Question 1

If both firms are competitive price takers, they both produce 100 units, for a total of 200 units. As a cartel, they jointly produce a total of 100 units. If they behave as Cournot firms, they each produce 66.67 units, for a total of 133.33 units. If one firm is a Stackelberg leader, it produces 100 units and the follower produces 50 units, for a total of 150. In terms of output, and therefore social welfare, the structures are ranked as competitive, Stackelberg, Cournot, cartel.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

crobinson2013

  • Hero Member
  • *****
  • Posts: 535
Reply #2 on: Jul 1, 2018
Thank you


otokexnaru

  • Sr. Member
  • ****
  • Posts: 314
Reply #3 on: Jul 1, 2018
No problemo


« previous next »
 

Did you know?

Carbamazepine can interfere with the results of home pregnancy tests. If you are taking carbamazepine, do not try to test for pregnancy at home.

Did you know?

It is widely believed that giving a daily oral dose of aspirin to heart attack patients improves their chances of survival because the aspirin blocks the formation of new blood clots.

Did you know?

Giardia is one of the most common intestinal parasites worldwide, and infects up to 20% of the world population, mostly in poorer countries with inadequate sanitation. Infections are most common in children, though chronic Giardia is more common in adults.

Did you know?

The ratio of hydrogen atoms to oxygen in water (H2O) is 2:1.

Did you know?

In the United States, there is a birth every 8 seconds, according to the U.S. Census Bureau's Population Clock.

The digital image of a fetus shows a well-developed head and a comparatively smaller body. At 7 ... The digital image of a fetus shows a well-developed head and a comparatively smaller body. At 7 ...
CT scan of the head shows a massive bleed with a midline shift. CT scan of the head shows a massive bleed with a midline shift.
Major components and functions of the nervous system. Major components and functions of the nervous system.
A cutaway of a small block Chevrolet V-8 showing the passage from the cylinder head through the ... A cutaway of a small block Chevrolet V-8 showing the passage from the cylinder head through the ...
The figure shows an LR circuit with a switch and a 240-volt battery. At the instant the switch ... The figure shows an LR circuit with a switch and a 240-volt battery. At the instant the switch ...
Self-crossing F2 plants to produce an F3 generation shows that there are two different genotypes amo Self-crossing F2 plants to produce an F3 generation shows that there are two different genotypes amo
Video: Transcription - Introns and exons

For a complete list of videos, visit our video library