1. When an automaker begins offering the low cost financing or the rebates, others tend to do the same. Discuss what two oligopoly models might offer an explanation of this behavior?
2. Fast-food restaurants tend to cluster together. That is, on one corner, there might be four similar the fast-food restaurants. How can this be explained using a location game theory model?
3. Would it ever make sense for a firm to charge a price at or below cost of the product?
4. McDonald's charges a higher price for a Big Mac in New York City than it does in a small town in Iowa. Is this an example of third-degree price discrimination? Explain.
5. Discuss what additional sources of risk come from international investments?