Reference no: EM133202891
Assignment:
DEFINITIONS.
Define any 10 terms. (10 points maximum each).
Model Elasticity
Parameter Net profit margin
Economies of scale Strategy
Diminishing returns Public good
Trigger strategy Private good
Multi- stage game Marginal Utility
Consumer surplus (demonstrate) Externality
Producer surplus (demonstrate) Oligopoly
Limit pricing
II. Essay Questions. Answer any three questions. Answer all parts of each question.
1. a) What is Imperfect Competition?
b) Develop a model demonstrating a possible result for one producer in the Short run.
c) What is the long run? Explain and demonstrate.
d) Is there a steady state equilibrium for any one producer?
2. a) What is Monopoly? What are the characteristics of monopoly? What is essential for a monopolist to exist?
b) Using graphical analysis, develop a model of Monopoly
What is the short run result? Demonstrate.
c) What becomes the dilemma for a monopolist? What may happen to the short-run efficient (market) result?
d) What is the long run in monopoly?
3. a) What is risk? Why does risk exist?
b) Explain:
- Economic risk
- Business risk
- Market risk
- Inflation risk Interest rate risk
- Credit risk
- Liquidity risk
- Currency risk
c) How is probability related to risk?
Explain expected value, and construct an example.
d) Explain Standard deviation and variance.
4. a) What is meant by competitive strategy? Provide examples.
b) Give examples of non-price competition
d) What is Price discrimination? Explain
First degree discrimination
Second degree discrimination
Third degree discrimination
Under what circumstances can a firm engage in price discrimination? Give examples.
e) Does game theory serve to explain pricing behavior? Provide an example.