1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
wel
3 years ago
15

Consider a town in which only two residents, Kevin and Maria, own wells that produce water safe for drinking. Kevin and Maria ca

n pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water.
Price Quantity Demanded Total Revenue
(Dollars per gallon) (Gallons of water) (Dollars)
6.00 0 0
5.50 45 $247.50
5.00 90 $450.00
4.50 135 $607.50
4.00 180 $720.00
3.50 225 $787.50
3.00 270 $810.00
2.50 315 $787.50
2.00 360 $720.00
1.50 405 $607.50
1.00 450 $450.00
0.50 495 $247.50
0 540 0
Suppose Kevin and Maria form a cartel and behave as a monopolist. The profit-maximizing price is $
––––– per gallon, and the total output is
––––– gallons. As part of their cartel agreement, Kevin and Maria agree to split production equally. Therefore, Kevin's profit is $
––––– .

Suppose Kevin and Maria form a cartel and behave as a monopolist. The profit-maximizing price is $
––––– per gallon, and the total output is
––––– gallons. As part of their cartel agreement, Kevin and Maria agree to split production equally. Therefore, Kevin's profit is $
––––– , and Maria's profit is $
––––– .

Suppose that Kevin and Maria have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Kevin says to himself, "Maria and I aren't the best of friends anyway. If I increase my production to 45 gallons more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow."

After Kevin implements his new plan, the price of water
–––––––––– to $
––––– per gallon. Given Maria and Kevin's production levels, Kevin's profit becomes $
––––– and Maria's profit becomes $
––––– .

Because Kevin has deviated from the cartel agreement and increased his output of water to 45 gallons more than the cartel amount, Maria decides that she will also increase her production to 45 gallons more than the cartel amount.

After Maria increases her production, Kevin's profit becomes $
––––– , Maria's profit becomes $
––––– , and total profit (the sum of the profits of Kevin and Maria) is now $
––––– .

True or False: Based on the fact that both Kevin and Maria increase production from the initial cartel quantity, you know that the output effect was larger than the price effect at that quantity.

Note that Kevin and Maria started by behaving cooperatively. However, once Kevin decided to cheat, Maria decided to cheat as well. In other words, Maria's output decisions are based on Kevin's actions.

This behavior is an example of
–––––––––– .
Business
1 answer:
jarptica [38.1K]3 years ago
6 0

Answer:

Monopolist profit maximizing price

A: $3 per gallon , total output =270 Kelvins profit = $810(801/7/2 = $405

Maria's profit = $405

B. $2.5 per gallon . Kelvin's profit =$450 Maria's profit = 337.5

C = False. At the same quantity , fall in price brings fall in revenue

Cournot Nash equilibrium

Explanation:

In a monopolist market system , price are set higher than the marginal cost as the producer enjoy the dominance of the market through the production of a unique good.

At the price of $3 , change in demand =(270-225) =45 , change in revenue = ($810-$787.50)22.5 and marginal revenue = (45/22,5) = 0.5. That forms the maximizing price for a monopolist.

On the new arrangement , price drops to $2.5 , Maria's profit =(315-45/2)2.5 = $337.5 and Kelvin's = ($787.5-337.5) = $450

Cournot Nash equilibrium is business model that explains the competition among rival companies producing similar product on the level of output produced independently.

You might be interested in
A small factory produces toilet paper. The annual demand is 360,000 units, and the company produces toilet paper in batches. On
Valentin [98]

Answer:

26,833 units

Explanation:

Optimal production quantity is the quantity at which business incur minimum cost. This is the level of production per batch where the incur the lowest cost.

EOQ =  

C = Carrying cost = 10 / 100 = $0.1 per unit

S = Setup cost = $100

D =Annual Demand = 360,000

EOQ = \sqrt{ \frac{2 X S X D}{C} }

EOQ = \sqrt{ \frac{2 X 100 X 360000}{0.1} }

EOQ = 26,833 units

7 0
2 years ago
An increasingly important advantage of the limited liability company is that its members?
victus00 [196]

An increasingly important advantage of the limited liability company is that its members are "able to deduct its operating losses against the member's regular revenue to the extent permitted by law".

<h3>What do you mean by limited liability company?</h3>

A Limited Liability Company (LLC) is refers to as a type of organization in which the members of that company is not liable for the losses occur in the business. The duties and responsibilities regarding losses are restricted here.

Adding to it, that means if the company fails to pay off its losses or debts to creditors, the personal assets of the members will not be added while paying the debt.

It is an enterprise structure that is the combination of the pass-thru taxation that is related to a partnership or sole proprietorship along with the rules of the company.

The main advantage of this type of company is that the members of that LLC can reduce their all operating losses like travelling, insurance, office supplies, payroll etc.

Moreover, the other benefits of Limited liability company include that this is more flexible than the other corporations and it provides different rights, classes and preferences to their members or managers.

Learn more about limited liability company, refer to the link:

brainly.com/question/3521418

#SPJ4

8 0
1 year ago
Dont give some bolonie long answer just say a, b, c , or d and If you don’t now or you think you now don’t answer thanks
Vitek1552 [10]

Answer:

your answer is

B. This is a heading

good luck :)

7 0
3 years ago
Suppose DeGraw Corporation, a U.S. exporter, sold a solar heating station to a Japanese customer at a price of 130.5 million yen
myrzilka [38]

Answer:

$845,207.3

Explanation:

Calculation for what dollar amount would DeGraw actually receive after it exchanged yen for U.S. dollars

First step is to calculate the exchange rate of 1 yen for 140.0 yen per dollar and 154.4 yen

Exchange rate of 1 Yen = $1 /140

Exchange rate of 1 Yen= $0.007142858

Exchange rate of 1 Yen = $1 / 154.4

Exchange rate of 1 Yen= $0.006476684

Now since the price for the item bought was 130,500,000 Yen which means that the exchange rate for 1 Yen will be $0.006476684

Now let calculate the dollar amount

Dollar amount=(130,500,000 *$0.006476684) / 1

Dollar amount= $845,207.3

Therefore the dollar amount that DeGraw would actually receive after it exchanged yen for U.S. dollars is $845,207.3

7 0
2 years ago
Isabella wants to do something for others around the holidays. She fills three boxes with things she does not need, and donates
Virty [35]

Answer:

I think is the first one I'm not sure but I think is that one.

5 0
3 years ago
Read 2 more answers
Other questions:
  • A firm's after-tax operating income was $1,000,000 in 2016. It started the year with total capital of $8,000,000 and raised an a
    12·1 answer
  • Direct effects of FDI arise when jobs are created in local suppliers as a result of the FDI and when jobs are created because of
    6·1 answer
  • . Janet, the manager of HollyOak Systems, is known for her passionate and people-friendly ways. Janet knows all her employees we
    6·1 answer
  • According to the mypyramid plan, who would likely consume the most food?
    11·1 answer
  • What is a good way to guard against disorderly cash records or cash loss?
    8·1 answer
  • A researcher interested in what factors make an employee best suited for a given job would most likely identify as a(n) ________
    10·1 answer
  • Companies HD and LD are both profitable, and they have the same total assets (TA), Sales (S), return on assets (ROA), and profit
    13·2 answers
  • craig thought he could earn $1,000 selling paintings in 6 months. instead, he made $1,200. what is the percentage difference?
    15·1 answer
  • TOMS is a shoe company that, since its inception, has given away one pair of shoes to someone in need for every pair purchased b
    15·1 answer
  • McNulty, Inc., produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot earn
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!