Home / Questions / Suppose that two airlines are Cournot duopolists serving the Peoria-Dubuque route, and the
Suppose that two airlines are Cournot duopolists serving the Peoria-Dubuque route, and the demand curve for tickets per day is Q ? 220 − 2p (so p ? 110 − Q/2). Total costs of running a flight on this route are 1,400 ? 20q, where q is the number of passengers on the flight. Each flight has a capacity of 80 passengers. In Cournot equilibrium, each duopolist will run one flight per day and will make a daily profit of
a.$400.
b.$800.
c.$220.
d.$700.
e.$3,000.
32.Suppose that the market demand curve for bean sprouts is given by P ? 880 − 4Q, where P is the price and Q is the total industry output. Suppose that the industry has two firms, a Stackelberg leader and a follower. Each firm has a constant marginal cost of $80 per unit of output. In equilibrium, total output by the two firms will be
a.100.
b.50.
c.150.
d.200.
e.25.
33.Suppose that the market demand curve for bean sprouts is given by P ? 820 − 2Q, where P is the price and Q is the total industry output. Suppose that the industry has two firms, a Stackelberg leader and a follower. Each firm has a constant marginal cost of $20 per unit of output. In equilibrium, total output by the two firms will be
a.200.
b.100.
c.300.
d.400.
e.50.
34.There are two firms in the blastopheme industry. The demand curve for blastophemes is given by p ? 3,600 − 4q. Each firm has one manufacturing plant and each firm i has a cost function C(q_{i}) ? q^{2}i, where q_{i} is the output of firm i. The two firms form a cartel and arrange to split total industry profits equally. Under this cartel arrangement, they will maximize joint profits if
a.and only if each firm produces 200 units in its plant.
b.they produce a total of 400 units, no matter which firm produces them.
c.and only if they each produce a total of 450 units.
d.they produce a total of 300 units, no matter which firm produces them.
e.they shut down one of the two plants, having the other operate as a monopoly and splitting the profits.
35.There are two firms in the blastopheme industry. The demand curve for blastophemes is given by p ? 4,200 − 3q. Each firm has one manufacturing plant and each firm i has a cost function C(q_{i}) ? q^{2}i, where q_{i} is the output of firm i. The two firms form a cartel and arrange to split total industry profits equally. Under this cartel arrangement, they will maximize joint profits if
a.they produce a total of 600 units, no matter which firm produces them.
b.they produce a total of 466.67 units, no matter which firm produces them.
c.and only if they each produce a total of 700 units.
d.and only if each firm produces of 300 units in its plant.
e.they shut down one of the two plants, having the other operate as a monopoly and splitting the profits.
36.A Stackelberg leader and follower choose their outputs to maximize their own profits. Local property taxes which constitute a lump sum tax for each of them are reduced by $500 per year for the leader and by $200 a year for the follower. In consequence, the firms
a.both increase their output, with the leader increasing its output by more.
b.both increase their output, with the follower increasing its output by more.
c.increase their output by equal amounts for each firm.
d.leave their outputs unchanged.
e.There is not enough information in the question to determine what the firms will do.
37.An industry has two colluding firms that act so as to maximize total profit in the industry and then split the profits equally. Firm 1 has cost function c(y) ? 8y. Firm 2 has cost function c(y) ? y^{2}. Each firm produces an integer number of units. Market demand is given by Y(p) ? 56 − p.
a.Firm 1 should produce 10 units and firm 2 should produce 10 units.
b.Firm 1 should produce 20 units and firm 2 should produce 4 units.
c.Each firm should produce 12 units.
d.Firm 1 should produce 24 units and firm 2 should produce 2 units.
e.None of the above.
38.An industry has two colluding firms that act so as to maximize total profit in the industry and then split the profits equally. Firm 1 has cost function c(y) ? 8y. Firm 2 has cost function c(y) ? y^{2}. Each firm produces an integer number of units. Market demand is given by Y(p) ? 72 − p.
a.Each firm should produce 16 units.
b.Firm 1 should produce 32 units and firm 2 should produce 2 units.
c.Firm 1 should produce 14 units and firm 2 should produce 14 units.
d.Firm 1 should produce 28 units and firm 2 should produce 4 units.
e.None of the above.
39.An industry has two firms—a Stackelberg leader and a follower. The price of the industry output is given by P ? 36 − Q, where Q is the total output of the two firms. The follower has a marginal cost of $0. The leader has a marginal cost of $9. How much should the leader produce in order to maximize profits?
a.12
b.18
c.9
d.7
e.None of the above.
40.An industry has two firms—a Stackelberg leader and a follower. The price of the industry output is given by P ? 84 − Q, where Q is the total output of the two firms. The follower has a marginal cost of $0. The leader has a marginal cost of $21. How much should the leader produce in order to maximize profits?
a.21
b.24
c.42
d.19
e.None of the above.
Dec 13 2019 View more View Less
State the objective of a group support system (GSS) and identify three characteristics that distinguish it from a DSS.View Solution: State the objective of a group suppo...
Jul 13 2020If a ball is thrown directly upward with a velocity of 80 ft/s, its height (in feet) after tseconds is given by y80t-16t2 What is the maximum height attained by the ball?
Apr 01 2021Which of the following is true regarding component units?A)Component units could include towns, school districts, counties, and municipalities.B)Component units may be re...
Jan 25 20205 Paid $150 to advertise in the County News. 9 Received $1,000 cash for services provided. 12 Paid $200 cash dividend. 15 Performed $4,200 of services on account. 17 Paid...
Jun 03 2020On September 1, 2013, Custom Shirts Inc. entered into a lease agreement appropriately classified as an operating lease. The lease term is three years. The annual payments...
Mar 26 2020. A certain two-input gate computes the exclusive-OR function using negative logic. What function does the same gate compute using positive logic?2. Is there a Boolean fu...
Jul 09 2020You are going to save money for your sonâs education. You have decided to place $2,066 every half year at the end of the period into a saving account earning 12.23 perc...
Sep 08 2020Logical Math task..? >
Apr 28 2020A researcher is attempting to decipher the lab notebook of a prior employee. The prior employee diagrammed the circuit shown in Figure 5.29 but gave no specification abou...
Jul 26 2020You bought a stock a year ago. Over the course of the year, you received $4/share in dividends. The stock currently sells for $65. How much did you pay for the stock a ye...
Sep 08 2020