Problem
1. During the oil crisis in the 1970s, long lines at gas stations disappeared soon after price controls were removed and gas prices were permitted to rise. Should this event be interpreted as evidence that the oil companies have monopoly power? Why or why not?
2. Some economists believe that firms rarely attempt predatory pricing because it would be a very risky act even if it were legal. Why may this be so?
3. Firm X cuts its prices, and competing Firm Y soon goes out of business. How would you judge whether this price cut was an act of legitimate and vigorous competition or an anticompetitive act?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.