Microeconomic Theory
12th Edition
ISBN: 9781337517942
Author: NICHOLSON
Publisher: Cengage
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Question
Chapter 15, Problem 15.11P
a)
To determine
Reason for extent of firm’s market.
b)
To determine
To find:
Profit maximizing price.
c)
To determine
To find:
Derivation of
d)
To determine
To find:
Profit at equilibrium is
e)
To determine
To find:
Number of firms to enter in long-run.
f)
To determine
To find:
Socially optimal level of differentiation
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Again consider Atlanta as an oligopoly market with five airlines that behave in a Cournot Model fashion. The Atlanta market demand schedule is:P = 400 - .5*Q.The Cost schedule for Delta is:MC=AC=Scomp=100.The Cost schedule for the other four firms (United, Southwest, et al) is:MC=AC=Scomp=60.In the previous scenario Delta’s market share was 20% since all five firms were identical. What is Delta’s new market share?
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Again consider Atlanta as an oligopoly market with five airlines that behave in a Cournot Model fashion. The Atlanta market demand schedule is P = 400 - .5*Q. The Cost schedule for Delta is: MC=AC=Scomp=100. The Cost schedule for the other four firms (United, Southwest, et al) is MC=AC=Scomp=60. In the previous scenario, Delta’s market share was 20% since all five firms were identical. What is Delta’s new market share?
Now suppose United Air Lines enters the Atlanta market. Consider this to be an oligopoly market with two firms that behave in a Cournot Model fashion. The
market demand schedule is cost schedule for both firms are:
P = 400 - .5*Q,
and firm level cost for both firms is
MC=AC=Scomp=100.
What is the Cournot Market Price? Fill in the blank below with your answer. Your answer should be entered as a whole number such as 102. If you get 102.56,
do not round or enter any decimal places, just enter 102 and nothing else for the answer.
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