HW5a - Econ 419 Industrial Organization Jura Liaukonyte...

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Econ 419 – Industrial Organization Jura Liaukonyte Homework 5 Due Wed, April 11th, in my mailbox NOTE: All HWs will be picked up at 3:30PM – if you HW is not in my mailbox by then, it will be considered late submission. Submit ONE version per study group. Write legibly. I reserve a right not to grade messy or illegible answers. Include a title page, listing the homework number and the names of all members of the study group. PART I – Analytical Problems 1. End-Of-Chapter problems: Chapter 18: Problems 1, 2, 3 Problem 1 (a) Since demand is given by Q = 30 – p , inverse demand is given by p = 30 – Q . Profit of the Volvo dealer is given by () wQ Q Q wQ pQ w p D = = ) 30 ( , π Maximization with respect to Q will give 2 15 2 15 2 30 0 2 30 w p w w Q w Q Q D + = = = = = 225 15 4 2 15 2 15 2 15 2 + = + = w w w w w w D (b) Since the quantity sold is the quantity purchased, we can simply invert the equation for Q derived in part (a) to get a demand for cars as a function of Q
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HW5a - Econ 419 Industrial Organization Jura Liaukonyte...

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