hi!, please i would appreciate your help with the questions below.
starting from the first question in the first picture ( IMG_8356)
I GOT A FEW OF THE QUESTIONS RIGHt AS YOU CAN SEE. HOPEFULLY THAT HELPS to GIVE YOU AN IDEA
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3 points possible (graded) Economists are often asked to help the Department of Justice evaluate the costs and benefits of mergers. This problem walks you through two rudimentary merger analyses. Consider a market where two firms engage in Cournot competition. They face inverse industry demand curve P = 25 - - Q. The firms each face a marginal cost of $1. What is the equilibrium price under Cournot competition? How much does each firm produce? 97 = 9B = p* = O NO #2/2 points (graded) If the two firms merge, they will act as a monopolist and set a single price pol . Find the monopoly price and quantity. pM = 13 Answer: 13 13 QM = 24 Answer: 24 24 Explanation The monopolist maximizes profit. We calculate per-unit profit as unit revenue, p/, less unit cost, 1. Total profit multiplies per-unit profit, pod - 1, multiplied by the number of units sold, QM. We aren't given QM, but we can derive it from market demand pM - 25 - ; QM. So the monopolist solves maxpm (pM - 1) (50 -2pM) . Taking the derivative with respect to pol and setting it equal to zero yields p/ = 13, QM - 50 = 2 . 13 = 24. O NProblem PS7.3.3 1 point possible (graded) What is the change in total surplus that results from the merger? (Use a positive number for an increase and a negative number for a decrease.) Submit You have used 0 of 2 attempts Problem PS7.3.4 3 points possible (graded) Based on your calculation, would you recommend permitting the merger to proceed? The merger causes no change in social welfare The merger should be prohibited (i.e. not permitted) O The merger should be permitted What if each firm operating in this market incurred a fixed cost of $100? (Assume that the fixed cost is relevant to producer surplus )What if each firm operating in this market incurred a fixed cost of $100? (Assume that the fixed cost is relevant to producer surplus.) The merger should be prohibited (i.e. not permitted) The merger should be permitted The merger causes no change in social welfare What if firms didn't compete in the Cournot model, but in the Bertrand model? (Don't account for fixed costs.) The merger causes no change in social welfare The merger should be permitted The merger should be prohibited (i.e. not permitted) Save Submit You have used 0 of 2 attempts earch O NO #
