Questions from Managerial Economics

Q: Two firms compete in a Cournot fashion. Firm 1 successfully engages

Two firms compete in a Cournot fashion. Firm 1 successfully engages in an activity that raises its rival’s marginal cost of production. a. Provide two examples of activities that might raise rivals’ m...

Q: The market for taxi services in a Midwestern town is monopolized by

The market for taxi services in a Midwestern town is monopolized by firm 1. Currently, any taxi services firm must purchase a $40,000 “medallion” from the city in o...

Q: In the following game, determine the maximum amount you would be

In the following game, determine the maximum amount you would be willing to pay for the privilege of moving (a) first, (b) second, or (c) third: There are three players, you and two rivals. The player...

Q: You are the manager of 3D Designs—a large imaging company

You are the manager of 3D Designs—a large imaging company that does graphics and web design work for companies. You and your only competitor are contemplating the purchase of a new 3-D imaging device....

Q: Tom Jackson has been running a successful steakhouse that specializes in serving

Tom Jackson has been running a successful steakhouse that specializes in serving upscale steak dinners. His current marketing campaign targets residential households. Recently, it was announced that a...

Q: The elasticity of demand for a firm’s product is –4 and

The elasticity of demand for a firm’s product is –4 and its advertising elasticity of demand is 0.32. a. Determine the firm’s optimal advertising-to-sales ratio. b. If the firm’s revenues are $30,000,...

Q: Consider the following simultaneous move game: / 1In working

Consider the following simultaneous move game: 1In working this problem, note that the positive integers consist of the numbers {1, 2, 3, 4, . . .}, and “infinity”...

Q: During the early days of the Internet, most dot-coms

During the early days of the Internet, most dot-coms were driven by revenues rather than profits. A large number were even driven by “hits” to their site rather than revenues. This all changed in earl...

Q: During the dot-com era, mergers among some brokerage houses

During the dot-com era, mergers among some brokerage houses resulted in the acquiring firm paying a premium on the order of $100 for each of the acquired firm’s customers. Is there a business rational...

Q: Bank 1 and Bank 2 are considering entering a compatibility agreement that

Bank 1 and Bank 2 are considering entering a compatibility agreement that would permit the users of each bank’s automated teller machines (ATMs) access to the other bank’s ATMs. Bank 1 has a network o...