Q: Why is the firm’s demand curve flatter than the total market demand
Why is the firm’s demand curve flatter than the total market demand curve in monopolistic competition? Suppose a monopolistically competitive firm is making a profit in the short run. What will happen...
See AnswerQ: Some experts have argued that too many brands of breakfast cereal are
Some experts have argued that too many brands of breakfast cereal are on the market. Give an argument to support this view. Give an argument against it.
See AnswerQ: Why is the Cournot equilibrium stable? (i.e.,
Why is the Cournot equilibrium stable? (i.e., Why don’t firms have any incentive to change their output levels once in equilibrium?) Even if they can’t collude, why don’t firms set their outputs at th...
See AnswerQ: Two firms are in the chocolate market. Each can choose to
Two firms are in the chocolate market. Each can choose to go for the high end of the market (high quality) or the low end (low quality). Resulting profits are given by the following payoff matrix: a....
See AnswerQ: Two major networks are competing for viewer ratings in the 8:
Two major networks are competing for viewer ratings in the 8:00!9:00 P.M. and 9:00!10:00 P.M. slots on a given weeknight. Each has two shows to fill this time period and is juggling its lineup. Each c...
See AnswerQ: Two competing firms are each planning to introduce a new product.
Two competing firms are each planning to introduce a new product. Each will decide whether to produce Product A, Product B, or Product C. They will make their choices at the same time. The resulting p...
See AnswerQ: We can think of U.S. and Japanese trade policies
We can think of U.S. and Japanese trade policies as a prisoners’ dilemma. The two countries are considering policies to open or close their import markets. The payoff matrix is shown...
See AnswerQ: Elizabeth Airlines (EA) flies only one route: Chicago-
Elizabeth Airlines (EA) flies only one route: Chicago-Honolulu. The demand for each flight is Q = 500 – P. EA’s cost of running each flight is $30,000 plus $100 per passenger. a. What is the profit-m...
See AnswerQ: You are a duopolist producer of a homogeneous good. Both you
You are a duopolist producer of a homogeneous good. Both you and your competitor have zero marginal costs. The market demand curve is P = 30 ! Q where Q = Q1 + Q2. Q1 is your output and Q2 your compe...
See AnswerQ: You play the following bargaining game. Player A moves first and
You play the following bargaining game. Player A moves first and makes Player B an offer for the division of $100. (For example, Player A could suggest that she take $60 and Player B take $40). Player...
See Answer
