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Find the percentage differences between actual and maximum profits, and actual and profit-maximizing levels of output.
Why Will the monopolist now produce an output at which elasticity of demand is less than 1? Explain why or why not.
What would be the total profit made by competitors? Why would there be no deadweight loss? Why is the rise in input costs not passed on in full to customers?
Give a numerical example to show that a monopolist's marginal revenue can be upward-sloping over part of its range.
For linear demand and constant marginal cost, explain in commonsense terms why the deadweight loss of monopoly is greater the flatter the demand curve.
You are producing a new play that will open next week. Have you maximized your profits? Explain why you might not have.
Show that this price leaves you with a smaller profit than if you can announce different prices early in the morning of each day.
How might its per-car and percamera prices change if it wants to maximize its revenue from visitors?
Assume that spending $80 on advertising will attract 100 more Type B customers. Should the monopolist advertise? If so, what will happen to price?
What price should the producer charge the Type As? At this price, how large must a coupon discount be before Type Bs choose to use them?
What will price and output be if there is no dominant firm? Now assume that there is a dominant firm, whose marginal cost is constant at $6.
Construct a prisoners' dilemma matrix to show that having everyone drive on one side of the road will be a unanimous choice, but we cannot predict.
In the grim trigger example of the text, show that if the discount rate. What happens to the incentive to cheat as a person's discount rate approaches zero?
Then show what happens if the doomsday machine's existence is not known to the United States.
A selfless person approaches Jones and Smith with a $100 bill. Write out the payoff matrix for this game, and then find its Nash equilibrium.
Construct a game that portrays this situation and show that it has a solution in mixed strategies.
What happens to market output? To the profit of the nonmerging firm? To the profit of the merged firm? Does this outcome seem odd to you?
Then in the same diagram show the Stackelberg equilibrium output with one firm a leader and the other a follower. Compare it with the previous two situations.
Why do you expect franchised stores to be more common in small cities (where most Piggly Wigglys and IGAs are located) than in large ones?
What factors might these types of stores have in common behind their declines? How would you determine which were important and which were not?
Go to the library or the Internet and discover some other reason for Wal-Mart's success. How would you test whether or not that reason is actually responsible?
Compile a list of strategies that have been identified as sources of McDonald's success.
Why has Yahoo created a barrier to entry? In what ways is this barrier desirable? Undesirable?
Calculate the lagged yearly net inflation rate from the CPI data in percent terms.
What is the impact of economic concepts in the U.S Constitution on contemporary economic issues and policies?