Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help Question 1 5 pts In a given market the inverse demand function is P = 1m (It per year. The interest rate is

image text in transcribedimage text in transcribedimage text in transcribed

Please help

image text in transcribedimage text in transcribedimage text in transcribed
Question 1 5 pts In a given market the inverse demand function is P = 1m (It per year. The interest rate is r = [1135 and the cost structure of a rm is given by Cfol = 8t) g. Assume the market is monopolized and answer the following: The per year monopoly prot for the rm of is: C) 1soo Q 2sso C) 1875 Q 2o25 In a given market the inverse demand function is P = 1 Ft] (I! per year. The interest rate is r = [1.135 and the cost structure of a rm is given by C(o) = at} o. Assume the market is monopolized and answer the following: A research institute develops a new technology that reduces marginal cost to 5D and upon entering the market it competes on quantity with the incumbent (who cannot access the new technology). As a result, per year prots for the rms are: C} BUD for the incumbent and 120C] for the entrant. C} All!) for the incumbent and 2500 for the entrant. D EDD for the incumbent and EDDIE] for the entrant. 0 2GB for the incumbent and SDDU for the entrant. In a given market the inverse demand function is P = 1m El per year. The interest rate is r = DDS and the cost stmcture of a rm is given by CM} = 3d g. Alternatively, the research institute can sell the new technology to the monopolist and then stay out of the market. If it is safe to assume that no more advances will be made in the future: then the maximum price that the monopolist is willing to pay for the innovation and the minimum price that the research institute is willing to receive for it are respectively: D 42,000 and 52,500 so the monopolist ends up not buying the new technology. 0 EIEDU and 52.5% so the monopolist ends up buying the new technology. Cl 42,ooo and 33,600 so the monopolist ends up buying the new technology. C} ?5,EDD and 33.6% so the monopolist ends up buying the new technology. In a given market the inverse demand lunction is P = 1m El per year. The interest rate is r = DDS and the cost structure of a rm is given by [2ng = 3t] g. Another alternative is to license the technology to the other rm [for this: assume that the innovator has obtained a patent for it} but stay in the market. Determine which of the following is true: {3: It would charge a fee of t = 45 per unit sold and obtain 5,1?5 in per year prots. (3 It would charge a fee of t = 15 per unit sold and obtain 3,2(10 in per year prots. 0 It would charge a fee of t = 30 per unit sold and obtain BATE: in per year prots. D It would charge a fee oft = 30 per unit sold and obtain 3,1d in per year prots. In a given market the inverse demand function is P = 1ft] Ci per year. The interest rate is r = DDS and the cost structure of a rm is given by CM) = 8t] :1}. Now assume that originally there was a |Bournot duopoly in the market {with equal costs) and that it would be too costly fer the research institute to enter the market. Answer the following: If the research institute sells an exclusive license at a xed annual fee 1'. to rm 1 (with the threat of going to the other rm if rm 1 rejects the offer). then D The optimal annual fee is 2,1(10 and prots for rm 1 and 2 are 40D and BUD respectively. 0 The optimal annual fee is LEGO and prots for rm 1 and 2 are 90D and BUD respectively. (3 The optimal annual fee is 2,113!) and prots for rm 1 and 2 are 40D and 4m] respectively. 0 The optimal annual fee is 1,600 and prots for rm 1 and 2 are SOD and 4oo respectively

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Macroeconomics

Authors: Robert C. Feenstra, Alan M. Taylor

Fourth Edition

1319061729, 978-1319061722

More Books

Students also viewed these Economics questions

Question

2. Find five metaphors for communication.

Answered: 1 week ago