Reference no: EM131109442
Imagine a firm in monopolistic competition. A firm in monopolistic competition produces a product that you are familiar with, such as clothing and food. A monopolistic competition is a market in which:
many firms compete
each firm produces a product that is slightly different from products of other competing firms
each firm competes on product quality, price, and marketing
each firm is free to enter and exit the market
Use the cost and revenue curves for your market with monopolistic competition to determine price, economic profit, and output.
Explain the decisions you will make to maximize profit.
Compare oligopoly (when there are only two firms) outcomes to the outcome in a true monopoly industry. What are the differences? What are the similarities?
How does applying game theory to decisions faced by oligopolists change profit in the long and short run?
Using game theory, analyze decisions and choices that oligopolists must make to ensure success.
|
The price elasticity of demand for a textbook
: The price elasticity of demand for a textbook is estimated to be 1 no matter what the price or quantity demanded. In this case:
|
|
Find the optimal two-part tariff for every consumer
: Suppose there are two types of consumers, in equal number. Type 1 have demand D1(p) = 1 – p; and Type 2 D2(p) = 3 (1 – p). Marginal cost is zero. Find the optimal uniform price. Find the optimal two-part tariff for every consumer assuming information..
|
|
When bank receives deposits
: When a bank receives deposits,
|
|
When the fed lowers the federal funds rate
: When the Fed lowers the federal funds rate, the quantity of money ________ and the supply of loanable funds ________.
|
|
Explain the decisions you will make to maximize profit
: Imagine a firm in monopolistic competition. A firm in monopolistic competition produces a product that you are familiar with, such as clothing and food. Explain the decisions you will make to maximize profit. Compare oligopoly (when there are only tw..
|
|
The income elasticity of demand for gasoline is small
: Suppose Paula consumes both 87 and 89 octane gasoline. Assume that before the recent price increases, Paula paid $3.00/gallon for 87 octane and $3.10/gallon for 89 octane. The price of each grade of gasoline has now risen by exactly 65 cents. Make th..
|
|
Market is characterized by demand curve
: A market is characterized by a demand curve that can be expressed as P = 96 – (1/3) Q. Each of the two identical firms currently serving the market has a total cost function of the form C = 12 q. There are no fixed costs. If the 2 duopolists behave a..
|
|
Discretionary monetary policy is monetary policy
: Discretionary monetary policy is monetary policy that is based on
|
|
All the factors affecting demand in this model
: Assume that all the factors affecting demand in this model remain the same, but that the price has changed. Further assume that the price changes are 100, 200, 300, 400, 500, 600 cents. Plot the corresponding supply curve on the same graph using the ..
|