hw4 - The Colorado College Department of Economics and...

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1 The Colorado College Department of Economics and Business Block 5 Econ 151 Homework #4 (1). (a) Define what you mean by oligopoly. (3 points) (b) Give some examples of oligpolistic market structures. (2 points) (c) Suppose there are two firms – 1 and 2. They enter into a collusion. Firm 1 is the low cost producer. Both firms decide that the low cost firm will be the leader. Draw the figure for price leadership by low cost producer collusive oligopoly showing the output and price for each firm. (5 points) (2) The information below provides the prices and quantities in a hypothetical market for automobile antifreeze. Price per gallon Quantity demanded Quantity supplied 1 700 300 2 600 400 3 500 500 4 400 600 5 300 700 6 200 800 7 100 900 8 0 1000 (a) Plot the demand and supply curve for antifreeze. What is the equilibrium price and quantity generated by buyers and sellers in the market? (3 points) (b) Suppose that production of antifreeze generates pollution in the form of chemical runoff and that the pollution imposes a $2 cost on society for each gallon of antifreeze
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This homework help was uploaded on 04/19/2008 for the course EC 151 taught by Professor Ghosh during the Spring '08 term at Colorado College.

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hw4 - The Colorado College Department of Economics and...

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