ECON2000 - Task #2
Solution all questions. Display all working.
1). Component A: The local zoo features hired you to assist these people in environment admission rates. The zoo's managers recognize that there are two distinct require curves pertaining to zoo entry. One require curve is applicable to those age ranges 12 to 64, while the other is made for children and senior citizens. Both demand and marginal earnings curves will be:
PA = 9. 6 вЂ“ zero. 08QA
MRA = on the lookout for. 6 вЂ“ 0. 16QA
PCS = 4 вЂ“ 0. 05QCS
MRCS sama dengan 4 вЂ“ 0. 10QCS
where PENNSYLVANIA = adult price, COMPUTERS = children's/senior citizen's value, QA = daily amount of adults, and QCS sama dengan daily volume of children and senior citizens. Crowding is not a problem at the tierpark, so that the managers consider marginal cost to get zero. In case the zoo chooses to price discriminate, what should the cost and variety be in every single market? Estimate the business's total earnings in every sub-market. (5 marks) 2). Suppose that two identical organizations, Firm you and Firm 2, generate widgets and they are the just firms on the market. Their total costs are given by Ci = 30Qi, which means MC1 = 31; MC2 sama dengan 30. The 2 firms choose their output levels at the same time, and industry demand is given by L = one hundred and fifty вЂ“ Q, where Q = Q1 + Q2. The little revenue agendas for each firm are the following:
MR1 sama dengan 150 вЂ“ 2Q1 вЂ“ Q2
MR2 = a hundred and fifty вЂ“ 2Q2 вЂ“ Q1
a)Determine each firm's response function and find the Cournot-Nash equilibrium. Decide the output, price and revenue of producing icons for each firm. (5 marks)
b)Suppose that the two companies collude and form a cartel. What is going to be the resulting end result, price and profit for each and every firm? [Hint: market marginal earnings is a hundred and fifty вЂ“ 2Q, because total revenue sama dengan P*Q sama dengan (150-Q)*Q] (5 marks)
3). Suppose that the airline industry consisted of only two firms: Caribbean and Tx Air Corp. Let the two firms possess identical price functions, C(Q) = 40Q; MC = 40. Believe the demand contour for the industry has by P = 95 вЂ“ Queen and that each firm expects the additional to...