Why is advertising prevalent in many oligopolies

Assignment Help Econometrics

Reference no: EM13202211

Why is advertising prevalent in many oligopolies, especially when industry demand is inelastic? Illustrate your answer by assuming that with advertising, a firm's demand curve has price elasticity of -1.5 and without advertising, it is -2. If MC is $10, what is the difference in the profit-maximizing price?

Reference no: EM13202211

Questions Cloud

Describe the nonexclusion consumption concept : External Social Benefits: During recent years, professional sports have enjoyed an unprecedented boom all across the United States and Canada. Team revenues have skyrocketed with growing fan interest and attendance, thriving broadcast revenues.

How fast is the height of the water increasing : How fast is the height of the water increasing when the water has filled 2 feet of the deep end?

Why is the confidence that a recession will happen : If Congress wants to use fiscal policy to prevent a recession, suggest whether they should cut taxes if there is a suspicion of a recession, cut taxes when there is confidence that a recession will happen

Consider the differential equation : Consider the differential equation dy/dx = [3e^(-2t)][y^2-7y+10]. By considering the slope field for this differential equation, determine whether the equilibrium states are stable or unstable. Make your analysis clear.

Why is advertising prevalent in many oligopolies : Illustrate your answer by assuming that with advertising, a firm's demand curve has price elasticity of -1.5 and without advertising, it is -2. If MC is $10, what is the difference in the profit-maximizing price

At what rate will the boat be approaching the dock : If the rope is pulled through the pulley at a rate of 20 ft/min, at what rate will the boat be approaching the dock when 100 ft of rope is out?

Predict what would have occurred had the monopoly succeeded : Identify a situation in the past 50 years in which the government used antitrust policies to stop a monopoly from occurring. Include the circumstances of the proposed monopoly and the reason the government stepped in.

What dimensions will produce the largest total area : A rancher has 208 feet of fencing to enclose two adjacent rectangular corrals. What dimensions will produce the largest total area?

User Account

All Pages