Completed quickly and followed instructions given. Grammar, spelling, etc. was all good as well. Thank you so much! Will hire in the future.
Duopoly + Dominant Firm
Consider the global market for crude oil, consisting of Saudi Arabia, Iran, and the rest of the world. Suppose that price taking consumers in the rest of the world have demand for crude oil given by:
P=500-0.75Q
Assume that price-taking fringe suppliers of crude oil in the rest of the world have marginal costs given by:
P=400 +0.6Q
Suppose that Saudi Arabia has marginal costs given by:
P=50+0.25Q
And Iran has marginal costs given by:
P=50+0.5Q
(Assume that neither Iran or Saudi Arabia has demand of their own). Suppose that Saudi Arabia and Iran are contemplating forming a Cournot duopoly cartel (Assume residual demand represents case 3).
A. What is the optimal amount of crude oil that Saudi Arabia, Iran and the rest of the world produces?
B. What is the equilibrium price of crude oil in the market?
C. What is the mark-up charged by Saudi Arabia and Iran?
D. What are the profits to Saudi Arabia and Iran?
E. What is the share of Saudi Arabia’s production to total duopoly production?
F. How does the Cournot mark-ups compare to the full enforcement (multi plant monopoly consisting of Saudi Arabia and Iran) mark-ups?
Show more
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more