Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

Economics


Home >> Microeconomics

There are two movie theatres in the town of Harkinsville: Modern Multiplex, a first-run theatre, and Sticky Shoe, which shows movies that have been out for a while at a cheaper price. The demand for Modern Multiplex is given by: QMM = 14 – PMM + PSS, while the demand for Sticky Shoe is: QSS = 8 – 2PSS + PMM, where prices are in dollars and quantities are gauged in hundreds of moviegoers. Modern Multiplex has a per-customer cost of $4, while Sticky Shoe has a per-customer cost of only $2.

1. From the demand equations alone, what indicates whether Modern Multiplex and Sticky Shoe offer services that are substitutes or complements?

2. Write the profit function for each theatre in terms of PSS and PMM. Discover each theatre’s best-response rule.

3. Discover the Nash equilibrium price, quantity, and profit for each theatre.

4. What would each theatre’s price, quantity, and profit be if the two decided to collude to maximize joint profits in this market? Why isn’t the collusive outcome Nash equilibrium?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91224074
  • Price:- $25

Guranteed 24 Hours Delivery, In Price:- $25

Have any Question?


Related Questions in Microeconomics

Question imagine that a 10000 ten-year bond was issued at

Question: Imagine that a $10,000 ten-year bond was issued at an interest rate of 6%. You are thinking about buying this bond one year before the end of the ten years, but interest rates are now 9%. a. Given the change in ...

Question flour and eggs are complements in making a cake

Question: Flour and eggs are complements in making a cake. Assume that cakes, flour, and eggs are bought and sold in price-takers' markets. An external event decreases the variable cost of producing flour. Using supply a ...

Question consider an income tax and a head tax the sizes of

Question: Consider an income tax and a head tax, the sizes of which have been set so that the government collects the same amount of money under each tax. Which tax does the consumer prefer? The response must be typed, s ...

Question 1 assume you have two goods food and beverage with

Question: 1) Assume you have two goods: food and beverage with a monthly income of $100. The price of food (Y axis) is $20 and the price of beverage (X axis) is $10. Graph the model (i.e. set the intercept terms) and cor ...

A in 1994 the marginal cost of producing the power mac was

a) In 1994, the marginal cost of producing the Power Mac was about $1,500 per unit, and a rough estimate of the monthly demand curve was: P = 4,500 - .15Q. At the time, what was Apple's optimal output and pricing policy? ...

Question say alcohol is strictly illegal in your dorm and

Question: Say alcohol is strictly illegal in your dorm and any student caught supplying or drinking it faces automatic expulsion from school. As you might expect, some students will not be deterred by the threat. It is, ...

Question if you were a subsidiary manager at a

Question: If you were a subsidiary manager at a multinational, what are the lessons you can draw from "being a subsidiary manager at a multinational" that can help you successfully convince the headquarters that your ide ...

Question where formal cartels are illegal what techniques

Question: Where formal cartels are illegal, what techniques can firms use to attempt to prevent "price wars" from breaking out and to maintain a price level in the market, which approximates the level that a monopolist w ...

Question - suppose a company borrows 10 million for a year

Question - Suppose a company borrows $10 million for a year at an interest rate of 6 percent annually, with all interest and principal to be paid at the end of the year How much money will the company give the lender at ...

Question from the early 1950s through 1973 the japanese

Question: From the early 1950s through 1973, the Japanese economy grew at an average annual rate of almost 10%. It then slowed down to 5% per year from 1973 through 1991, and 1% per year from 1992 through 1998. (A) What ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As

Follow Us

© Copyright 2013-14 mywordsolution.com All rights reserved