« previous next »

Author Question: The above figure shows the reaction functions for two pizza shops in a small isolated town. Compare ... (Read 167 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?

Children with strabismus (crossed eyes) can be treated. They are not able to outgrow this condition on their own, but with help, it can be more easily corrected at a younger age. It is important for infants to have eye examinations as early as possible in their development and then another at age 2 years.

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

Your skin wrinkles if you stay in the bathtub a long time because the outermost layer of skin (which consists of dead keratin) swells when it absorbs water. It is tightly attached to the skin below it, so it compensates for the increased area by wrinkling. This happens to the hands and feet because they have the thickest layer of dead keratin cells.

Did you know?

Egg cells are about the size of a grain of sand. They are formed inside of a female's ovaries before she is even born.

Did you know?

Serum cholesterol testing in adults is recommended every 1 to 5 years. People with diabetes and a family history of high cholesterol should be tested even more frequently.

The anterior pituitary is sometimes called the master gland because it secretes many hormones that r The anterior pituitary is sometimes called the master gland because it secretes many hormones that r
Attributed to the Manner of Peleus Painter, Red-figure calyx-krater. Attributed to the Manner of Peleus Painter, Red-figure calyx-krater.
Instruct the patient to use an applicator to apply a small amount of stool in the appropriate boxes ... Instruct the patient to use an applicator to apply a small amount of stool in the appropriate boxes ...
Fluidization - Reaction Rate Chart Fluidization - Reaction Rate Chart
Evaluate the first derivation of the following functions. Evaluate the first derivation of the following functions.
Functions application question Functions application question
Video: Control of ventilation rate by other brain centers (posts, hypothalamus & cerebral cortex)

For a complete list of videos, visit our video library