during the energy crisis in the mid-1970s, a politician remarked , "Excesssively high profit do not indicate that the major oil companies are responsive to custmers. It means they are gouging public" how would you respond to this attack?
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during the energy crisis in the mid-1970s, a politician remarked , "Excesssively high profit do not indicate that the major oil companies are responsive to custmers. It means they are gouging public" how would you respond to this attack?
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- Some years ago. two intercity bus companies, Greyhound Lines, Inc. and Trailways Transportation System, wanted to merge. One possible definition of the market for this case was the market for intercity bus service. Another possible definition was the market for intercity transportation, including personal cars, car rentals, passenger trains, and commuter air flights.' Which definition do you think the bus companies preferred, and why?Please Read and repond to the following questions: https://hbr.org/2019/02/netflix-and-the-economics-of-bundling A. Explain why Netflix is able to profitably release movies for free at home instead of releasing in theaters first for higher a price before releasing at home. Why doesn't this model work for all movie production companies? B. Recently more firms have adopted the Netflix model. For example, Warner Brothers announced they would release all movies on HBO Max at home at the same time they are released in theaters in 2021. Who benefits from this change? Who is made worse off from this change? Do you think society is better or worse off from this change?a. “The only way for a firm in a monopolistic competition to increase its sales is to lower its price.” True or false? Briefly explain. b. "Being the only seller in the market, the monopolist can choose any price and quantity it desires." True or false? Briefly explain.
- (a) Does a monopolistically competitive firm have an incentive to produce at the level of output that minimizes the average total cost at the long run equilibrium? Explain with a diagram. (b) Suppose CLP Holdings Limited is a natural monopolist with constant marginal cost. Draw a diagram to indicate the profit-maximizing level of output, the profit-maximizing price, and the size of the profit. If the government wants to increase the market efficiency through price regulation, would you suggest the government setting the price equal to the firm’s marginal cost or its average total cost? Explain in detail with the diagram in part (i).Imagine that you are advising a small new car dealership. They ask:A) given the information below, what is the best price they should put on all the cars, assuming every buyer pays the same price and how much profit will they make? B) is there a better way to make profits and how much profit could they make? why might this strategy be difficult to use? The firm can't change their costs. But they could use a different pricing scheme, not charging every customer the same price. Fixed cost for business is $4000 Variable cost is $20,000 for each car they get from the manufacturer. They anticipate the following customers. Ms. Rich would pay up to $30,000 Mr. Upper Middle would pay up to $26,000 Ms. Middle would pay up to $22,000 Mr. Lower Middle would pay up to $18,000 Ms. Poor would pay up to $16,000How is monopolistic competition like monopoly? How is it like perfect competition? Discuss briefly.
- Back in the 1950s, General Motors (GM) was at its peak. It was widely viewed as a shining example of how a large company should be managed, and controlled three quarters of the US car market.As at 2020, GM remains the biggest automaker by sales in the US, but it controls less than 20% of the market. For consumers, this level of competition has been wonderful; the level of choice when it comes to buying and leasing. For GM, as well as other large carmakers, having to operate in this realm isn't always fun, but if pressed they'll admit that there's something distinctly American about the market being hyper-competitive — and they might even acknowledge that having Germans and Japanese brands to do battle against helps them to improve their own capabilities. a. Are the firms in the automobile industry operating efficiently in (i) the 1950s and (ii) presently? Explain.Back in the 1950s, General Motors (GM) was at its peak. It was widely viewed as a shining example of how a large company should be managed, and controlled three quarters of the US car market. As at 2020, GM remains the biggest automaker by sales in the US, but it controls less than 20% of the market. For consumers, this level of competition has been wonderful; the level of choice when it comes to buying and leasing. For GM, as well as other large carmakers, having to operate in this realm isn't always fun, but if pressed they'll admit that there's something distinctly American about the market being hyper-competitive — and they might even acknowledge that having Germans and Japanese brands to do battle against helps them to improve their own capabilities. State what market structure existed in the automobile industry in the US in the 1950s. Illustrate and explain how equilibrium is determined. Can excess profit be earned in this industry in the long run. Explain.Back in the 1950s, General Motors (GM) was at its peak. It was widely viewed as a shining example of how a large company should be managed, and controlled three quarters of the US car market.As at 2020, GM remains the biggest automaker by sales in the US, but it controls less than 20% of the market. For consumers, this level of competition has been wonderful; the level of choice when it comes to buying and leasing. For GM, as well as other large carmakers, having to operate in this realm isn't always fun, but if pressed they'll admit that there's something distinctly American about the market being hyper-competitive and they might even acknowledge that having Germans and Japanese brands to do battle against helps them to improve their own capabilities. State what market structure existed in the automobileindustry in the US in the 1950s. Illustrate and explain how equilibrium is determined. Can excess profit be earned in this industry in the long run. Explain. State what market…
- Back in the 1950s, General Motors (GM) was at its peak. It was widely viewed as a shining example of how a large company should be managed, and controlled three quarters of the US car market.As at 2020, GM remains the biggest automaker by sales in the US, but it controls less than 20% of the market. For consumers, this level of competition has been wonderful; the level of choice when it comes to buying and leasing. For GM, as well as other large carmakers, having to operate in this realm isn't always fun, but if pressed they'll admit that there's something distinctly American about the market being hyper-competitive and they might even acknowledge that having Germans and Japanese brands to do battle against helps them to improve their own capabilities. State what market structure existed in the automobileindustry in the US in the 1950s. Illustrate how equilibrium is determined.Back in the 1950s, General Motors (GM) was at its peak. It was widely viewed as a shining example of how a large company should be managed, and controlled three quarters of the US car market.As at 2020, GM remains the biggest automaker by sales in the US, but it controls less than 20% of the market. For consumers, this level of competition has been wonderful; the level of choice when it comes to buying and leasing. For GM, as well as other large carmakers, having to operate in this realm isn't always fun, but if pressed they'll admit that there's something distinctly American about the market being hyper-competitive — and they might even acknowledge that having Germans and Japanese brands to do battle against helps them to improve their own capabilities. Are the firms in the automobile industry operating efficiently in (i) the 1950s and (ii) presently? Explain. What role, if any, does advertising play in the automobile industry in the (i) 1950s and (ii) presently? Explain.Raphael's hair salon is a monopoly in a small town and is currently earning an economic profit. a) Does Raphael's hair salon produce the allocatively efficient quantity? Explain. b) Assume that Raphael signs a new lease with an increase in rent, a fixed cost. Will the price of haircuts provided by Raphael increase, decrease, or stay the same in the short run? Explain. c) Assume that new hair salons enter the market and that the market becomes monopolistically competitive. In long-run equilibrium, will Raphael's hair salon produce the productively efficient quantity? Explain.
