The above figure shows the reaction functions for two pizza shops in a small isolated town. Compare the Cournot, Stackelberg, cartel, and competitive equilibria in terms of total output and welfare
What will be an ideal response?
If both firms are competitive price takers, they both produce 100 units, for a total of 200 units. As a cartel, they jointly produce a total of 100 units. If they behave as Cournot firms, they each produce 66.67 units, for a total of 133.33 units. If one firm is a Stackelberg leader, it produces 100 units and the follower produces 50 units, for a total of 150. In terms of output, and therefore social welfare, the structures are ranked as competitive, Stackelberg, Cournot, cartel.
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In the figure above, the marginal cost of producing a computer
A) increases as more computers are produced. B) stays the same as more computers are produced. C) decreases as more computers are produced. D) is the same as the marginal cost of producing a television set.
Untreated raw sewage is dumped directly into rivers and oceans
a. only in less-developed economies b. only in rural areas c. only in urban areas d. in every large city in the United States e. in some of the largest U.S. cities
The demand for a monopolistically competitive firm's product is
A. perfectly elastic. B. more elastic than for a monopoly. C. more inelastic than for a monopoly. D. perfectly inelastic.
If the population doubles in size, what can be expected to happen to the market for automobiles?
a. Automobile manufacturers will decrease supply. b. The price of automobiles will decrease. c. More automobiles will be sold at any given price. d. People will use fewer automobiles. e. None of these.