Assignment Questions:
1. What important characteristics do all three types of imperfect competitive firms share?
2. True of False: A firm with Market Power can sell whatever quantity it wishes at whatever price it chooses?
3. Why do most successful societies offer patents and copyright protection even though these protections enable sellers to charge higher prices?
4. Why is marginal revenue always less than the price for a monopolist but equal to the price for a perfectly competitive firm?
5. True of False: Because a natural monopolist charges a price greater than marginal cost, it necessarily earns a positive economic profit.
Assignment Questions:
1. What is the major difference between an oligopoly and a firm in monopolistic competition?
2. Why is it so difficult for a cartel to enforce a non price cutting agreement?
3. Why do you often hear people shouting rather than just talking to one another at parties?
4. In the example of the Falkland Island incident, why did the British spend enormous sums of money on such a small piece of Real Estate to keep it under British Rule?
5. Explain why a military arms race is an example of a prisoner's dilemma?
6. Why would Warner Bros make a mistake of waiting until the film is almost over before negotiating with a singer to sing a song for the last scene?