Chapter15: Oligopoly And Strategic Behavior
Section: Chapter Questions
Problem 6P
Related questions
Question
6
![Figure: Market for Rides
Price and cost (dollars per ride)
16
ATC (for 1 firm)
12
8
Demand
4
10
20
30
40
50
Quantity (rides per day)
Refer to the figure to answer the following. The aim is to assess the possibility of a Natural Oligopoly
based on the given information in the figure.
a) What is the lowest possible price that will be set by the given firm?
[ Select]
b) What is the efficient scale of one firm? [ Select ]
c) What is the quantity demanded in the market at the lowest possible price set by the given firm ?
[ Select ]
d) What is the number of firms that can meet the quantity demanded?
[ Select ]
e) Is this an example of a natural oligopoly? [ Select ]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fabaffa11-0c2d-49d6-8618-6ddfc630fb06%2F6f926867-f5a1-468b-878a-073ae042fc85%2Fqn4sn4k_processed.png&w=3840&q=75)
Transcribed Image Text:Figure: Market for Rides
Price and cost (dollars per ride)
16
ATC (for 1 firm)
12
8
Demand
4
10
20
30
40
50
Quantity (rides per day)
Refer to the figure to answer the following. The aim is to assess the possibility of a Natural Oligopoly
based on the given information in the figure.
a) What is the lowest possible price that will be set by the given firm?
[ Select]
b) What is the efficient scale of one firm? [ Select ]
c) What is the quantity demanded in the market at the lowest possible price set by the given firm ?
[ Select ]
d) What is the number of firms that can meet the quantity demanded?
[ Select ]
e) Is this an example of a natural oligopoly? [ Select ]
![Figure: Market for Lucky Jeans
Price and cost (dollars per pair)
160
АТС
MC
120
80
40
D
MR
30
60
90
120
Quantity (Lucky Jeans per day)
Lucky Jeans is a brand that exists in a monopolistic competitive market. Based on this piece of
information and using the figure answer the following questions:
1) What is the firm's profit maximizing output/quantity? [Select]
2) What is the firm's profit maximizing price? [ Select]
3) The firm makes: [ Select ]
4) The efficient scale is: [ Select ]
5) The excess capacity is: [ Select]
6) The markup is: [ Select]
>
>](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fabaffa11-0c2d-49d6-8618-6ddfc630fb06%2F6f926867-f5a1-468b-878a-073ae042fc85%2Fjii3ph_processed.png&w=3840&q=75)
Transcribed Image Text:Figure: Market for Lucky Jeans
Price and cost (dollars per pair)
160
АТС
MC
120
80
40
D
MR
30
60
90
120
Quantity (Lucky Jeans per day)
Lucky Jeans is a brand that exists in a monopolistic competitive market. Based on this piece of
information and using the figure answer the following questions:
1) What is the firm's profit maximizing output/quantity? [Select]
2) What is the firm's profit maximizing price? [ Select]
3) The firm makes: [ Select ]
4) The efficient scale is: [ Select ]
5) The excess capacity is: [ Select]
6) The markup is: [ Select]
>
>
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