« previous next »

Author Question: The above figure shows the reaction functions for two pizza shops in a small isolated town. Compare ... (Read 223 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?

Immunoglobulin injections may give short-term protection against, or reduce severity of certain diseases. They help people who have an inherited problem making their own antibodies, or those who are having certain types of cancer treatments.

Did you know?

Human neurons are so small that they require a microscope in order to be seen. However, some neurons can be up to 3 feet long, such as those that extend from the spinal cord to the toes.

Did you know?

Women are two-thirds more likely than men to develop irritable bowel syndrome. This may be attributable to hormonal changes related to their menstrual cycles.

Did you know?

In the United States, congenital cytomegalovirus causes one child to become disabled almost every hour. CMV is the leading preventable viral cause of development disability in newborns. These disabilities include hearing or vision loss, and cerebral palsy.

Did you know?

Liver spots have nothing whatsoever to do with the liver. They are a type of freckles commonly seen in older adults who have been out in the sun without sufficient sunscreen.

Myopia (nearsightedness). In the uncorrected top figure, the image comes into focus in front of the Myopia (nearsightedness). In the uncorrected top figure, the image comes into focus in front of the
Schools are a primary agent of socialization. One of their functions is to teach children the ... Schools are a primary agent of socialization. One of their functions is to teach children the ...
Demonstrate the Application of Triangular, Figure-Eight, and Tubular Bandages Demonstrate the Application of Triangular, Figure-Eight, and Tubular Bandages
Figure-8s on the toes mobilize joints of the foot. Figure-8s on the toes mobilize joints of the foot.
Entrepreneurship: Starting and Operating a Small Business (3rd Edition) Entrepreneurship: Starting and Operating a Small Business (3rd Edition)
Electron micrograph of plasmids isolated from E. coli Electron micrograph of plasmids isolated from E. coli
Video: Glucose Evaluation Procedure

For a complete list of videos, visit our video library