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3 years ago

Both firms in a Cournot duopoly would enjoy lower profits if:

Business

1 answer:

daser333 [38]3 years ago

4 0

Answer:

each firm simultaneously increased output above the Nash equilibrium level.

Explanation:

A French mathematician, Antoine Augustine Cournot developed the Cournot duopoly in his economic model “Researches into the mathematical principles of the theory of wealth”, of 1838.

Cournot duopoly also known as the Cournot competition, is an economic model where two (2) business firms having identical cost functions compete in a oligopolistic market of imperfect competition with homogeneous products.

Under the Cournot duopoly, the competing firms offer identical products and thus, choose an amount or quantity to produce independently and at the same time because they cannot collude.

Both firms in a Cournot duopoly would enjoy lower profits if each firm simultaneously increased output above the Nash equilibrium level.

Hence, the advantage of the Cournot duopoly is that, it inhibits competing firms from deviating unilaterally.

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Concentration ratios measure the Group of answer choices geographic location of the largest corporations in each industry. degre

nika2105 [10]

Answer:

percentage of total industry sales accounted for by the largest firms in the industry.

Explanation:

The concentration ratio calculated the market share percentage for an industry and the same is held by the larger firms inside the industry. Also it determined the total output that could be generated from the number of firms in the industry

Therefore as per the given options, the above options should be considered correct

3 0

3 years ago

Ocean co. just paid a dividend of $2 per share out of earnings of $4 per share. if the book value per share is $25, what is the

BaLLatris [955]

The sustainable growth rate (sgr) is 8 percent.

<h3><u>What is Sustainable growth rate?</u></h3>

The highest rate of growth that a business or social enterprise may sustain without using more equity or debt to fund expansion is known as the sustainable growth rate (SGR).
In other words, it is the rate at which the business may expand without borrowing money from other sources by using only its own internal earnings.
The SGR aims to increase sales and revenue while reducing financial leverage.

A corporation can avoid financial trouble and excessive leverage by achieving the SGR. Get or compute the company's return on equity (ROE) first. By comparing net income to shareholders' equity, ROE assesses a company's profitability.

Know more about sustainable growth rate with the help of the given link:

brainly.com/question/5452967

#SPJ4

6 0

2 years ago

The market price of a security is $74. Its expected rate of return is 20.2%. The risk-free rate is 3% and the market risk premiu

tigry1 [53]

Answer:

The market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged) will be $44.10.

Explanation:

Note: This question is not complete. The complete question is therefore presented before answering the question as follows:

The market price of a security is $74. Its expected rate of return is 20.2%. The risk-free rate is 3% and the market risk premium is 6.5%. What will be the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)

Assume that the stock is expected to pay a constant dividend in perpetuity.

Explanation of the answer is now given as follows:

Since the correlation coefficient with the market portfolio doubles (and all other variables remain unchanged), it implies that beta and also the risk premium will also double.

From the question, we can obtain:

Current risk premium = Expected rate of return - Market risk premium = 20.2% - 6.5% = 13.70%

As the current risk premium will double, we have:

New risk premium = Current risk premium * 2 = 13.70% * 2 = 27.40%

Also, we have:

New discount rate = New risk premium + Market risk premium = 27.40% + 6.5% = 33.90%

Since it is assumed that the stock is expected to pay a constant dividend in perpetuity, the dividend can therefore e calculated as follows:

Dividend = Current market price * Current expected rate of return = $74 * 20.2% = $14.95

The new market price of the security can now be calculated as follows:

New market price of the security = Dividend / New discount rate = $14.95 / 33.90% = $44.10

Therefore, the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged) will be $44.10.

5 0

3 years ago

Explain in your own words how traffic congestion leads to allocative inefficiency.

vlabodo [156]

Answer:

Wear and tear on vehicles leads to more recurrent replacements and repairs.

Explanation:

Traffic congestion can occur as a result of a lack of road capacity.

The causes of traffic congestion include overpopulation, frequent use of private cars, and inadequate public transport.

Traffic congestion may slow down the growth of metropolitan cities.

It also formulates economic geographies.

Wear and tear on vehicles leads to more recurrent replacements and repairs.

7 0

3 years ago

To help a firm achieve a competitive advantage, each distinct activity performed in the value chain needs to contribute to the f

Fiesta28 [93]

Answer:

Contribute to the firm's strategic position as either low-cost leader or differentiator.

Explanation:

To help a firm achieve a competitive advantage, each distinct activity performed in the value chain needs to contribute to the firm's strategic position as either low-cost leader or differentiator. In order to achieve a sustainable competitive advantage, a firm must either perform its activities in a different way or it should perform totally different activities as compared to their competitors. This is the basic essence and logic behind getting a sustainable competitive advantage. In order to do it, a firm must perform each activity which should contribute to the firm's position in making it either a cost effective producer of the products or making entirely different products. In this way, by either becoming cost-effective leader or differentiator in the market, a firm must gain very strong strategic position in gaining sustainable competitive advantage which will be very hard for the competitors to compete with.

8 0

3 years ago