« previous next »

Author Question: The above figure shows the reaction functions for two pizza shops in a small isolated town. Compare ... (Read 236 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?

About one in five American adults and teenagers have had a genital herpes infection—and most of them don't know it. People with genital herpes have at least twice the risk of becoming infected with HIV if exposed to it than those people who do not have genital herpes.

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?

More than 50% of American adults have oral herpes, which is commonly known as "cold sores" or "fever blisters." The herpes virus can be active on the skin surface without showing any signs or causing any symptoms.

Did you know?

Approximately 70% of expectant mothers report experiencing some symptoms of morning sickness during the first trimester of pregnancy.

Did you know?

Vital signs (blood pressure, temperature, pulse rate, respiration rate) should be taken before any drug administration. Patients should be informed not to use tobacco or caffeine at least 30 minutes before their appointment.

A plot of trophic diversity across the major groups of organisms shows highest trophic diversity amo A plot of trophic diversity across the major groups of organisms shows highest trophic diversity amo
During drought years on the Galapagos, small, easily eaten seeds become rare, le During drought years on the Galapagos, small, easily eaten seeds become rare, le
Reaction velocity as a function of substrate concentration Reaction velocity as a function of substrate concentration
Nutrients and Their Functions Nutrients and Their Functions
If 250. L of nitrogen reacts with 582 L of hydrogen by the reaction: N2(g) + 3 H2(g) 2 NH3(g), ... If 250. L of nitrogen reacts with 582 L of hydrogen by the reaction: N2(g) + 3 H2(g) 2 NH3(g), ...
A karyotype shows this child has three copies of chromosome 21. A karyotype shows this child has three copies of chromosome 21.
Video: Regulation of GFR: three methods, autoregulation & autoregulation via myogenic mechanism

For a complete list of videos, visit our video library