Suppose the demand for pizza in a small isolated town is p = 10 - Q. There are only two firms, A and B. Each has a cost function TC = 2 + Q. Determine the equilibrium quantities of each if firm A is the Stackelberg leader
What will be an ideal response?
Firm B's profit is ? = [10 - (qA + qB)]qB - 2 - qB. Maximizing with respect to its own output yields firm B's best response qB = 4.5 - qA/2. Knowing this, firm A substitutes this into demand and maximizes its profit. ? = [10 - qA - (4.5 - qA/2)]qA - 2 - qA. Maximizing with respect to qA yields qA = 4.5. Firm B responds by producing 2.25.
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The opportunity cost of economic growth is ________ and the benefit of economic growth is ________
A) increased current consumption; increased future consumption B) increased current consumption; decreased future consumption C) decreased current consumption; increased future consumption D) decreased current consumption; decreased future consumption E) nothing; increased future consumption
In the long run, a monopolistically competitive firm and a perfectly competitive firm both produce at minimum average cost.
Answer the following statement true (T) or false (F)
Acme Tools manufactures anvils, a forging tool. When the price of anvils was increased from $7 to $13, Acme Tools was willing and able to increase production from 1 to 4 units per day. Using the midpoint formula, what is Acme's price elasticity of supply for anvils?
a. 2 b. 1 c. 0.5 d. 4 e. 3.5
The fastest growing economy between 1870 and 1979 was
A. the United Kingdom. B. the United States. C. Japan. D. Brazil.