Managerial Economics End Term: 13 September 2026, Set S2 (May 2026 term)

Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $8. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1+ Q2 = 80 - P. Assuming that the firms are competing as per the Cournot competition, find out the equilibrium quantity for each firm, equilibrium price and profit (π1, π2) of each firm.
Based on the above data, answer the given subquestions.

Q1*………..

Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $8. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1+ Q2 = 80 - P. Assuming that the firms are competing as per the Cournot competition, find out the equilibrium quantity for each firm, equilibrium price and profit (π1, π2) of each firm.
Based on the above data, answer the given subquestions.

Q2*………………

Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $8. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1+ Q2 = 80 - P. Assuming that the firms are competing as per the Cournot competition, find out the equilibrium quantity for each firm, equilibrium price and profit (π1, π2) of each firm.
Based on the above data, answer the given subquestions.

P*=............

Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $8. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1+ Q2 = 80 - P. Assuming that the firms are competing as per the Cournot competition, find out the equilibrium quantity for each firm, equilibrium price and profit (π1, π2) of each firm.
Based on the above data, answer the given subquestions.

π1…………

Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $8. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1+ Q2 = 80 - P. Assuming that the firms are competing as per the Cournot competition, find out the equilibrium quantity for each firm, equilibrium price and profit (π1, π2) of each firm.
Based on the above data, answer the given subquestions.

π2………

Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $8. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1+ Q2 = 80 - P. Assuming that the firms are competing as per the Cournot competition, find out the equilibrium quantity for each firm, equilibrium price and profit (π1, π2) of each firm.
Based on the above data, answer the given subquestions.

Now suppose that the two firms are competing in the Stackelberg manner where one of the firms makes its output decision before the other. Suppose Firm 1 is the Stackelberg leader (i.e., makes its output decisions before Firm 2). Calculate the equilibrium quantity for the firms, equilibrium market price and profits (π1, π2) of both the firms in equilibrium. Q1*………..

Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $8. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1+ Q2 = 80 - P. Assuming that the firms are competing as per the Cournot competition, find out the equilibrium quantity for each firm, equilibrium price and profit (π1, π2) of each firm.
Based on the above data, answer the given subquestions.

Now suppose that the two firms are competing in the Stackelberg manner where one of the firms makes its output decision before the other. Suppose Firm 1 is the Stackelberg leader (i.e., makes its output decisions before Firm 2). Calculate the equilibrium quantity for the firms, equilibrium market price and profits (π1, π2) of both the firms in equilibrium. Q2*………………

Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $8. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1+ Q2 = 80 - P. Assuming that the firms are competing as per the Cournot competition, find out the equilibrium quantity for each firm, equilibrium price and profit (π1, π2) of each firm.
Based on the above data, answer the given subquestions.

Now suppose that the two firms are competing in the Stackelberg manner where one of the firms makes its output decision before the other. Suppose Firm 1 is the Stackelberg leader (i.e., makes its output decisions before Firm 2). Calculate the equilibrium quantity for the firms, equilibrium market price and profits (π1, π2) of both the firms in equilibrium. P*=............

Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $8. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1+ Q2 = 80 - P. Assuming that the firms are competing as per the Cournot competition, find out the equilibrium quantity for each firm, equilibrium price and profit (π1, π2) of each firm.
Based on the above data, answer the given subquestions.

Now suppose that the two firms are competing in the Stackelberg manner where one of the firms makes its output decision before the other. Suppose Firm 1 is the Stackelberg leader (i.e., makes its output decisions before Firm 2). Calculate the equilibrium quantity for the firms, equilibrium market price and profits (π1, π2) of both the firms in equilibrium. π1…………

Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $8. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1+ Q2 = 80 - P. Assuming that the firms are competing as per the Cournot competition, find out the equilibrium quantity for each firm, equilibrium price and profit (π1, π2) of each firm.
Based on the above data, answer the given subquestions.

Now suppose that the two firms are competing in the Stackelberg manner where one of the firms makes its output decision before the other. Suppose Firm 1 is the Stackelberg leader (i.e., makes its output decisions before Firm 2). Calculate the equilibrium quantity for the firms, equilibrium market price and profits (π1, π2)) of both the firms in equilibrium. π2………

The market demand curve for pizzas is P=420-Q and the market supply curve is P=60+2Q. A tax of t=12 INR is imposed on one unit of pizza sold. Answer the given subquestions.

The equilibrium quantity and price before incidence of tax are, P*=…..

The market demand curve for pizzas is P=420-Q and the market supply curve is P=60+2Q. A tax of t=12 INR is imposed on one unit of pizza sold. Answer the given subquestions.

The equilibrium quantity and price before incidence of tax are, Q*=…..

The market demand curve for pizzas is P=420-Q and the market supply curve is P=60+2Q. A tax of t=12 INR is imposed on one unit of pizza sold. Answer the given subquestions.

Consumer surplus before incidence of tax is, C.S = …..

The market demand curve for pizzas is P=420-Q and the market supply curve is P=60+2Q. A tax of t=12 INR is imposed on one unit of pizza sold. Answer the given subquestions.

Producer surplus before incidence of tax is, P.S = …….

The market demand curve for pizzas is P=420-Q and the market supply curve is P=60+2Q. A tax of t=12 INR is imposed on one unit of pizza sold. Answer the given subquestions.

The equilibrium quantity after the incidence of tax is, Qt = ……

The market demand curve for pizzas is P=420-Q and the market supply curve is P=60+2Q. A tax of t=12 INR is imposed on one unit of pizza sold. Answer the given subquestions.

The new price that the buyer pays after incidence of tax is, Pb= ……

The market demand curve for pizzas is P=420-Q and the market supply curve is P=60+2Q. A tax of t=12 INR is imposed on one unit of pizza sold. Answer the given subquestions.

The net price received by the seller after the incidence of tax is, Ps= …….

The market demand curve for pizzas is P=420-Q and the market supply curve is P=60+2Q. A tax of t=12 INR is imposed on one unit of pizza sold. Answer the given subquestions.

The loss in consumer surplus due to incidence of tax is, ΔCS= ….

The market demand curve for pizzas is P=420-Q and the market supply curve is P=60+2Q. A tax of t=12 INR is imposed on one unit of pizza sold. Answer the given subquestions.

The loss in producer surplus due to incidence of tax is, ΔPS= …..

The market demand curve for pizzas is P=420-Q and the market supply curve is P=60+2Q. A tax of t=12 INR is imposed on one unit of pizza sold. Answer the given subquestions.

The total tax revenue is, R= ……

Consider the two lotteries A and B. With lottery A, there is a 0.90 chance that you receive a payoff of $0 and a 0.10 chance that you receive a payoff of $400. With lottery B, there is a 0.5 chance that you receive a payoff of $30 and 0.50 chance that you receive a payoff of $50.
Based on the above data, answer the given subquestions.

What is the expected value of Lottery A…………..

Consider the two lotteries A and B. With lottery A, there is a 0.90 chance that you receive a payoff of $0 and a 0.10 chance that you receive a payoff of $400. With lottery B, there is a 0.5 chance that you receive a payoff of $30 and 0.50 chance that you receive a payoff of $50.
Based on the above data, answer the given subquestions.

What is the expected value of Lottery B………….

Consider the two lotteries A and B. With lottery A, there is a 0.90 chance that you receive a payoff of $0 and a 0.10 chance that you receive a payoff of $400. With lottery B, there is a 0.5 chance that you receive a payoff of $30 and 0.50 chance that you receive a payoff of $50.
Based on the above data, answer the given subquestions.

Suppose that John’s utility function is U= 100I What is John’s expected utility from Lottery A…………

Consider the two lotteries A and B. With lottery A, there is a 0.90 chance that you receive a payoff of $0 and a 0.10 chance that you receive a payoff of $400. With lottery B, there is a 0.5 chance that you receive a payoff of $30 and 0.50 chance that you receive a payoff of $50.
Based on the above data, answer the given subquestions.

Suppose that John’s utility function is U= 100I What is John’s expected utility from Lottery B…………

Consider the two lotteries A and B. With lottery A, there is a 0.90 chance that you receive a payoff of $0 and a 0.10 chance that you receive a payoff of $400. With lottery B, there is a 0.5 chance that you receive a payoff of $30 and 0.50 chance that you receive a payoff of $50.
Based on the above data, answer the given subquestions.

Suppose that John’s utility function is U= 100I What investment will John choose?

Consider the two lotteries A and B. With lottery A, there is a 0.90 chance that you receive a payoff of $0 and a 0.10 chance that you receive a payoff of $400. With lottery B, there is a 0.5 chance that you receive a payoff of $30 and 0.50 chance that you receive a payoff of $50.
Based on the above data, answer the given subquestions.

Suppose that John’s utility function is U= 100I Choose the correct alternative

The market for paper in southern region of India is characterized by the following demand and supply curves : QD=3400-20P and QS=800+20P Where QD is the quantity demanded in 100 pound lots and QS is the quantity supplied in 100 pound lots and P is the price per 100 pound lot. Currently there is no attempt to regulate the dumping of effluent into streams and rivers by paper mills. As a result, dumping is widespread. The Marginal External Cost (MEC) associated with the production of paper is given by the curve MEC= 0.05QS
Based on the above data, answer the given subquestions.

Calculate the output of paper if it is produced under competitive conditions and no attempt is made to monitor or regulate the dumping of effluent Q=..............

The market for paper in southern region of India is characterized by the following demand and supply curves : QD=3400-20P and QS=800+20P Where QD is the quantity demanded in 100 pound lots and QS is the quantity supplied in 100 pound lots and P is the price per 100 pound lot. Currently there is no attempt to regulate the dumping of effluent into streams and rivers by paper mills. As a result, dumping is widespread. The Marginal External Cost (MEC) associated with the production of paper is given by the curve MEC= 0.05QS
Based on the above data, answer the given subquestions.

Calculate the price of paper if it is produced under competitive conditions and no attempt is made to monitor or regulate the dumping of effluent P=..............

The market for paper in southern region of India is characterized by the following demand and supply curves : QD=3400-20P and QS=800+20P Where QD is the quantity demanded in 100 pound lots and QS is the quantity supplied in 100 pound lots and P is the price per 100 pound lot. Currently there is no attempt to regulate the dumping of effluent into streams and rivers by paper mills. As a result, dumping is widespread. The Marginal External Cost (MEC) associated with the production of paper is given by the curve MEC= 0.05QS
Based on the above data, answer the given subquestions.

Determine the socially efficient price of the paper PS=............

The market for paper in southern region of India is characterized by the following demand and supply curves : QD=3400-20P and QS=800+20P Where QD is the quantity demanded in 100 pound lots and QS is the quantity supplied in 100 pound lots and P is the price per 100 pound lot. Currently there is no attempt to regulate the dumping of effluent into streams and rivers by paper mills. As a result, dumping is widespread. The Marginal External Cost (MEC) associated with the production of paper is given by the curve MEC= 0.05QS
Based on the above data, answer the given subquestions.

Determine the socially efficient quantity of paper QS=...............

Based on the above data, answer the given subquestions.

Based on the above data, answer the given subquestions.

What is the cost minimizing input combination if the firm wants to produce 720 units per year? L*=.............

Based on the above data, answer the given subquestions.

What is the cost minimizing input combination if the firm wants to produce 720 units per year? K*=..............

A monopolist faces the demand curve P=25-Q, where P is measured in dollars per unit and Q in thousands of units. The monopolist has a constant average cost of $5 per unit. Answer the given subquestions.

What are the monopolist’s profit-maximizing price and quantity, P*= …….

A monopolist faces the demand curve P=25-Q, where P is measured in dollars per unit and Q in thousands of units. The monopolist has a constant average cost of $5 per unit. Answer the given subquestions.

What are the monopolist’s profit-maximizing price and quantity, Q*= …

A monopolist faces the demand curve P=25-Q, where P is measured in dollars per unit and Q in thousands of units. The monopolist has a constant average cost of $5 per unit. Answer the given subquestions.

The resulting profit will be, π*= ……..

A monopolist faces the demand curve P=25-Q, where P is measured in dollars per unit and Q in thousands of units. The monopolist has a constant average cost of $5 per unit. Answer the given subquestions.

The firm’s Lerner index is, L= ……

A monopolist never produces in

Choose the incorrect statement

Adverse selection occurs when

Moral hazard occurs when contracts are written in such a way that

Which of the following best describes the free rider problem?