Consider the fish market where demand is given by the following equation: P=52-Q where P is the price in dollars and Q is the quantity in kilos. All firms are identical and the marginal cost is 12. 15-If the market were competitive, what would the price be and how many units would be produced? You must provide your calculations. 16-If the market was made up of only one firm (a monopoly), what would the price be and how many units would be produced? You must provide your calculations. 17-If the market was made up of two firms (a duopoly) and they chose their level of production simultaneously: what would the price be and how many units would be produced by each firm? You must provide your calculations. 18-If the market was made up of two firms (a duopoly) and firm 2 was dominant (i.e. it chose its level of production first): what would the price be and how many units would be produced by each firm? You must provide your calculations. 19-Compare the quantities produced by each of the firms, which you calculated in the previous question (question 18). What do you notice? Explain with precise economic reasoning. 20-By comparing your answers obtained to questions 15, 16, 17 and 18, what do you notice? Explain with precise economic reasoning.
Consider the fish market where demand is given by the following equation: P=52-Q where P is the price in dollars and Q is the quantity in kilos. All firms are identical and the marginal cost is 12. 15-If the market were competitive, what would the price be and how many units would be produced? You must provide your calculations. 16-If the market was made up of only one firm (a monopoly), what would the price be and how many units would be produced? You must provide your calculations. 17-If the market was made up of two firms (a duopoly) and they chose their level of production simultaneously: what would the price be and how many units would be produced by each firm? You must provide your calculations. 18-If the market was made up of two firms (a duopoly) and firm 2 was dominant (i.e. it chose its level of production first): what would the price be and how many units would be produced by each firm? You must provide your calculations. 19-Compare the quantities produced by each of the firms, which you calculated in the previous question (question 18). What do you notice? Explain with precise economic reasoning. 20-By comparing your answers obtained to questions 15, 16, 17 and 18, what do you notice? Explain with precise economic reasoning.
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter9: Price Takers And The Competitive Process
Section: Chapter Questions
Problem 1CQ
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Transcribed Image Text:Consider the fish market where demand is given by the following equation:
P=52-Q
where P is the price in dollars and Q is the quantity in kilos.
All firms are identical and the marginal cost is 12.
15-If the market were competitive, what would the price be and how many units would be produced? You must
provide your calculations.
16-If the market was made up of only one firm (a monopoly), what would the price be and how many units would
be produced? You must provide your calculations.
17-If the market was made up of two firms (a duopoly) and they chose their level of production simultaneously:
what would the price be and how many units would be produced by each firm? You must provide your calculations.
18-If the market was made up of two firms (a duopoly) and firm 2 was dominant (i.e. it chose its level of production
first): what would the price be and how many units would be produced by each firm? You must provide your
calculations.
19-Compare the quantities produced by each of the firms, which you calculated in the previous question (question
18). What do you notice? Explain with precise economic reasoning.
20-By comparing your answers obtained to questions 15, 16, 17 and 18, what do you notice? Explain with precise
economic reasoning.
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