Slick Shades has a constant marginal cost of production equal to $80 and the distributors have a constant marginal cost of distribution equal to $30. If Slick Shades vertically integrates with the perfectly competitive distributors, the relevant demand curve for the combined firm is the ________ demand curve and the combined firm's marginal cost is equal to ________.
The figure above shows the wholesale demand and marginal revenue curves for Slick Shades Sunglasses, a sunglasses firm with market power. Slick Shades Sunglasses has a constant marginal cost of production and it sells to perfectly competitive independent retail distributors that have a constant marginal cost of distribution.
A) retail; $110
B) retail; $80
C) wholesale; $110
D) wholesale; $80
A) retail; $110
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Fresh Taste, Inc produces organic breakfast cereals. The market for breakfast cereals is monopolistically competitive
The figure above shows the demand curve that Fresh Taste faces (D), the company's marginal revenue curve (MR), its marginal cost curve (MC), and its average total cost curve (ATC). If Fresh Taste and other firms in the market are currently producing their profit maximizing quantities of cereals, then the market is A) in both short-run equilibrium and long-run equilibrium. B) in short-run equilibrium but not in long-run equilibrium. C) in long-run equilibrium but not in short-run equilibrium. D) neither in short-run equilibrium nor in long-run equilibrium.
When faced with a market failure, the government:
A. usually tries to redistribute the existing surplus more fairly. B. always takes over the market. C. often encourages the well-functioning firms to stay through protectionist policy. D. generally enacts thoughtful policy in order to create market efficiency.
The new classical school holds that: a. macroeconomic equilibrium is achieved only through active government intervention. b. unemployment is only temporary, because the economy tends naturally toward equilibrium. c. rigid prices and wages prevent the economy from achieving equilibrium. d. macroeconomic equilibrium cannot occur as long as the aggregate supply curve isvertical
e. rational expectations result in involuntary unemployment and prolonged periods of macroeconomic disequilibrium.
If the loanable funds market pays 8 percent and you want to earn $1,000 a year of interest income, how much in loanable funds must you supply to the market in order to accomplish this?
a. $8,000 b. $10,000 c. $14,000 d. $12,500 e. $18,000