Question

Cournot problem 4 firms (A,B,C,D) globally that make a product with many customers. They set production...

Cournot problem

4 firms (A,B,C,D) globally that make a product with many customers. They set production levels and then let the market determine market clearing price. Firms A,B,C have same cost structure and production process but D has different production process and cost structure. One year ago, firms ABC conspired to exclude D from the market and D lost all customers. B has total variable costs of $30,000 for producing 15,000 units and $40,000 for producing 20,000 units. Price of product has been constant at $6 per unit in the last year and total industry production is 90,000 units last year. ABC had same market shares as well. Before D got kicked out of the market, the market shares were 25% each for ABCD. What is the consumer damage from D being kicked out of the market and what is the preliminary damage estimate.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:

Cost structure of A, B,C

Variable cost = 30000 $ for 15000 Units

Price of product =$6

Industry prodction =90000

ABCD Market share= 90000/4=22500

Consumer damage after D Expelled =90000 Units-22500 Units

=67500 Units short supply

Preliminary damage:-

Preliminary damage will be the price hike since after expelling D the quantity production is less and hence demand is as before and due to this prices will rise to the label equiblirium . The prices from 6 will rise to approx 10 $

Hope you Like Answer Hit Thumbs up and Give us feed back . Ask your Doubts in comments on Problem if any.

All the best Friends for your examination and most welcome

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. A pharmaceutical company currently holds a patent on a cream that removes freckles. They are...
1. A pharmaceutical company currently holds a patent on a cream that removes freckles. They are in the final year of patent protection and have brought down the cost to make a carton of the cream over time to its current C(Q) = 100Q. The inverse-demand for cartons (which contain 10 individual bottles) of this product is P = 1,000 – 10Q. a. What price will the monopoly set, what quantity (in cartons) will be purchased, and how much profit...
A large firm is likely to make more total profits than a small firm. As for...
A large firm is likely to make more total profits than a small firm. As for the profit rates of the two firms The large firm will have the higher profit rate We cannot know which has the larger profit rate without more information Both firms will have the same profit rate The small firm will have the larger profit rate If BER, Inc paid wages a $15 per hour, and the average worker produced 5 units of output per...
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the...
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: 1 Variable costs per unit: 2 Direct materials $122.00 3 Direct labor 28.00 4 Factory overhead 48.00 5 Selling and administrative expenses 34.00 6 Total $232.00 7 Fixed costs: 8 Factory overhead $245,000.00 9 Selling and administrative expenses 148,000.00 Crystal Displays Inc. is...
300 words:      (b) Do you think that it is appropriate for firms like Black Diamond...
300 words:      (b) Do you think that it is appropriate for firms like Black Diamond to scrutinize its partner factories like this?      (c) Why or why not? case study Task: Read the “Black Diamond Equipment” case below and then answer the following questions. >> The way that Black Diamond is run, I don't really consider this the American way, I consider Black Diamond an extension of the attitude, the culture, the ethos, and the values of the life...
4. A company that makes optical computer input devices has calculated their revenue and costs as...
4. A company that makes optical computer input devices has calculated their revenue and costs as follows for the most recent fiscal period: Sales ​$522 000 Costs: ​Fixed Costs​ $145 000 ​Variable Costs ​208 800 Total Costs ​353 800 Net Income ​$168 200 ​What is the break-even point in sales dollars? 5. A company that makes environmental measuring devices has calculated their revenue and costs as follows for the most recent fiscal period: Sales ​$750 000 Costs: ​Fixed Costs​ $200...
Problem 11-18 Relevant Cost Analysis in a Variety of Situations [LO11-2, LO11-3, LO11-4] Andretti Company has...
Problem 11-18 Relevant Cost Analysis in a Variety of Situations [LO11-2, LO11-3, LO11-4] Andretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The company’s unit costs at this level of activity are given below: Direct materials $ 10.00 Direct labor 4.50 Variable manufacturing overhead 2.30 Fixed manufacturing overhead 5.00 ($300,000 total) Variable selling expenses 1.20 Fixed selling expenses 3.50 ($210,000 total) Total...
Bee & Gee is a multi-product, multi-brand, packaged goods company with a significant presence in the...
Bee & Gee is a multi-product, multi-brand, packaged goods company with a significant presence in the personal care and grooming category. Within each product category, it has numerous brands that sometimes compete with each other in the same geographical markets. Bee & Gee allocates its annual promotional budget for each product category using a top-down budgeting approach, after which brand managers of brands in each product category compete for promotional dollars for their own brand by submitting budget proposals. The...
Pick 4 questions to answer that you feel confident that you picked the correct answer Regarding...
Pick 4 questions to answer that you feel confident that you picked the correct answer Regarding setting the budget for integrated marketing communications options: - all-you-can-afford approaches involve setting objectives and then specifying tasks needed to achieve them. - incremental technique tries to set budgets based on other firms’ decisions. - competitive budgeting establishes the same budget year after year. - percentage-of-sales methods tend to ignore the promotion-causes-sales relationship. Many advertisements work primarily through recognition which means - that the...
1. Assume that Bradley Corporation Inc. produces advanced analytic software for computer simulations called Market-It. Based...
1. Assume that Bradley Corporation Inc. produces advanced analytic software for computer simulations called Market-It. Based on an analysis of product sales over a two-year period, Bradley’s marketing department estimates the demand for Market-It to be QM = 1,200 − 8PM + 4PS, where QM denotes units sold of Market-It software, PM denotes Market-It’s price, and PS denotes the price of a (competing) best-selling statistical software package (with both prices in dollars). a) Currently, PM = $200 and PS =...
In February 2012, the Pepsi Next product was launched into the US market. This case study...
In February 2012, the Pepsi Next product was launched into the US market. This case study provides students with an interesting insight into PepsiCo’s new product process and some of the challenging decisions that they faced along the way. Pepsi Next Case Study Introduction Pepsi Next was launched by PepsiCo into the US market in February 2012, and has since been rolled out to various international markets (for instance, it was launched in Australia in September 2012). The new product...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT