Download file to see previous pages...
If firm 1 decides to produce q111 then the prices will be set at P (q111 + q2). That is, for each quantity produced by firm 1, the price is given by the curve d1 (q2). This is (d1 (q2)) firm 1’s residual demand which gives all possible combinations of firm 1’s quantity and price for a given value of q2.
MC=MR. the assumption that MC is constant is made. The MR curve is given as r1(q2) with twice the slope of d1(q2) and with the same vertical intercept. The point at MC and MR meets corresponds to quantity q1ii(q2) which is the optimum quantity for firm 1.
If firm 2 favors a quantity corresponding to perfect competition, q2=qc whereby P (qc), then the quantity produced by firm 1 would be 0: q1ii(qc)=0. This is where MC=MR corresponding to d1 (qc) as shown in diagram below:
Given the fact that demand is linear and the marginal cost is constant, the function q1ii (q2) is also clear. q1ii (q2) is firm 1’s reaction function. Firm 1’s reaction function is the choice taken by firm 1 given an action taken by firm 2. Cournot equilibrium is the point at which firm 1’s and firm 2’s reaction functions meet given that they have the same cost function. This is shown below:
First degree price discrimination is a situation where the firm is charging a price that the consumer is willing to pay. With first degree price discrimination, the producer is able to extract the entire surplus from the consumer. With the 1st degree price discrimination, the profit is equal the sum of consumer surplus and producer surplus
The monopoly firm will sell quantity Q* up to the point where the price of the last unit sold just covers the MC of production. The profit of the firm is given by the difference between the price it is charging on each unit and the average cost of producing Q* units of output. The profit is given by area PAMC.
1st degree price discrimination is most practiced by single seller offering different prices to different individuals. In this
...Download file to see next pagesRead More
(60 marks) 2. Analyze the differences you would expect to find in the ways in which a research study is reported in an academic journal article and daily newspaper. (40 marks) Part 1 There are six main sections in which research findings are typically communicated.
While forming the strategies, they consider the geographical aspects and cultural peculiarities of the market segment. After the phase of information collection and strategy development, they apply the proposed changes to their five sections of products such as men’s, women’s, kid’s, goods and innerwear.
Various academic theories will be used to underpin the analysis and the findings will be summarised in a brief conclusion. Strategic Planning Issues Strategic planning involves considering the macro and operating environments within which the organisation operates.
The viscosity of blood is due more to _____________ than to any other factor. a. fibrin b. albumin c. sodium d. erythrocytes e. nitrogenous wastes 3. Three distinct types of muscle fibers are identified on the basis of their size, speed, and endurance. Which of the following athletic endeavors best represents the use of slow, oxidative fibers?
List the variables in the data set and identify the variable type for each variable (2 ? marks) The following is the list of variables and their types. Variable Type Age................................................. Continuous Gender...................
The model expends on three things:
3. the market risk premium, which is equal to the difference in the expected rate of return for the market as a whole; that is, the expected rate of return for the average security minus the risk free rate, (km-krf).
The CAPM has two primary strengths.
A double-blind experimental procedure would be best used to study this because the identities of the product (Aspirin and competitor equivalent brand) should be concealed. Further, using this type of study, subjective bias on the part of both
During exam period, students take a lot of stress and they find it quite difficult to prepare for their exams. This stress is caused because they had not conducted any kind of preparation for exam before hand and they sit at the last moment to study for their papers. At the last day they try to complete the entire year’s course work.