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In a homogeneous-good Cornet model where each of the n firms has a constant marginal cost m and the market demand curve is p = a

Jlenok [28]

Answer:

$Q=nq=\frac{n}{n+1}\frac{a-c}{b}$

if n=1 (monopoly) we have $Q^M=\frac{1}{2}\frac{a-c}{b}$

if n goes to infinity (approaching competitive level), we get the competition quantity that would be $Q^c=\frac{a-c}{b}$

Explanation:

In the case of a homogeneous-good Cournot model we have that firm i will solve the following profit maximizing problem

$Max_{q_i} \,\, \Pi_i=(a-b(\sum_{i=1}^n q_i)-m)q_i$

from the FPC we have that

$a-b\sum_{i=1}^n q_i -m -b q_i=0$

$q_i=\frac{a-b \sum_{i=2}^n q_i-m}{2b}$

since all firms are homogeneous this means that $q_i=q \forall i$

then $q=\frac{a-b (n-1) q-m}{2b}=\frac{a-m}{(n+1)b}$

the industry output is then

$Q=nq=\frac{n}{n+1}\frac{a-c}{b}$

if n=1 (monopoly) we have $Q^M=\frac{1}{2}\frac{a-c}{b}$

if n goes to infinity (approaching competitive level), we get the competition quantity that would be $Q^c=\frac{a-c}{b}$

7 0

3 years ago

Clean Tel, Inc. is considering investing in an 11-year project with annual cash inflows of $1,000,000. These cash inflows have a

cupoosta [38]

Answer:

d. 8%

Explanation:

The computation of the discount rate is shown below:

Initial investment = Present value of cash inflows

where,

Initial investment is $7,139,000

And, the present value of cash inflows

= Annual cash inflows × discount rate

We assume the discount rate be X

$7,139,000 = $1,000,000 × X

So,

X = 7139000 ÷ 1000000 = 7.139

= 8%

We simply applied the above formula in order to find out the discount rate

8 0

3 years ago

Select all that apply. Select the items that describe what most likely happens when the Federal Reserve increases the money supp

11111nata11111 [884]

Answer:

Businesses borrow more money.

Consumption increases.

Explanation:

The Federal Reserve is the body responsible for conducting monetary policy in the US. Monetary policy basically consists of two actions. The increase / decrease in the money supply in the economy and the increase / decrease in the interest rate. These actions may happen together, but they are technically independent.

When the Federal Reserve increases the supply of money in circulation, more money is circulated through loans and personal spending. This is considered a policy of stimulating the economy and can be done independently of interest rate changes, although the reduction of interest is also a stimulus monetary policy that can be done in conjunction with the increase in the money supply.

5 0

3 years ago

Explain external economics and external diseconomics

Effectus [21]

Answer:

If the social cost of an activity exceeds the costs relevant to the decision makers in the activity , there is an external diseconomy . If the benefits of an activity exceed its marginal cost , there is an external economy .

Explanation:

Thaats whaaat upp

4 0

3 years ago

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Your co-worker, Bill comes into the office and tells you that he is going to play "hooky" and go golfing believing that the boss

Pani-rosa [81]

Answer:

d. a palter

Explanation:

Based on the scenario being described within the question it can be said that Kant would call this misleading statement a palter. This term refers to a statement that has been made ambiguous in order to hide the truth from someone or in order to avoid committing yourself to something. Which in this scenario "You" are trying to hide the fact that Bill is playing "hooky" from your boss.

8 0

3 years ago

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