Myeconlab With Pearson Etext -- Access Card -- For Microeconomics
9th Edition
ISBN: 9780134143071
Author: PINDYCK, Robert, Rubinfeld, Daniel
Publisher: PEARSON
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Question
Chapter 12, Problem 3RQ
To determine
The availability of breakfast cereal in the market.
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Ilia is driving home from work. She needs to buy gas and notices an Exxon-Mobil station on one side of the street and a Shell station on the other side of the street. Although run by different companies, the two stations sell gasoline at the same price.
a. The most likely reason that the price is the same is that
_gas stations always make a profit, so they can charge any price they want.
_drivers need gas and are willing to pay whatever price a gas station charges.
_government regulation requires both gas stations to charge the same price.
_consumers view gasoline from different gas stations as perfect substitutes.
b. If one station increases its price,
_it will be fined by the government.
_it will sell more gasoline.
_it will make a higher profit.
_it will lose customers to the cheaper station across the street.
Some years ago, two intercity bus companies, Greyhound Lines, Inc. and Trailways Transportation System, wanted to merge. One possible definition of the market in 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?
In which situation at the following, _______ is the market dominated by only one seller/company?
Pure monopoly
Monopolistic competition
Oligopolistic competition
Pure competition
Free market
Chapter 12 Solutions
Myeconlab With Pearson Etext -- Access Card -- For Microeconomics
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- Select one or two examples of an industry characterized by monopoly and discuss how each example conforms to the definition of a monopoly?arrow_forwardIn which market structure there is a single seller?arrow_forwardSuppose, Pfizer Company is the only company allowed by the Sultanate government to sell COVID vaccine in Oman. According to you, what type of market Pfizer Company is having in Oman? a. Monopoly market b. Monopolistic market c. Competitive market d. Oligopoly marketarrow_forward
- Given the current market conditions, list and explain ONE strategy that dairy producers could implement to increase revenue.arrow_forwardIn “Hot Dog Hail Mary,” they discuss how the original model served low-quality food at high prices. What must the vendors believe about the price elasticity of demand for concessions for this business model to make sense?arrow_forwardWhen oil prices increased 10 fold during the 1973 – 80 energy crisis, many oil companies made huge profits. During this energy crisis, Congress considered imposing an “excess profits” tax on oil companies. If you were in Congress, would you vote for such a tax? Do unexpected monopolistic profits serve any useful function in a market economy?arrow_forward
- Which of the following is the best example of a market with monopolistic competitors? Group of answer choices electricity clothing luxury cars vanillaarrow_forwardList the characteristics of products that haveinelastic demand, and give several examples ofsuch products.arrow_forwardGaynor is the only manufacturer of gas pumps that automatically refill. Gaynor can earn a profit on the sale of these gas pumps a. in the short run but not in the long run because new firms will enter the industry in the long run. b. in the long run but not the short run because the monopolist will face competition in the short run. c. only in the long run because government regulations prevent monopolists from earning profits in the short run. d. in the long and short run because entry into the industry by new firms is blocked.arrow_forward
- Under which of the following forms of market a firm has no control over the price of its product (1) perfect competition (2) Oligopoly (3) Monopolyarrow_forwardWhy is a competitive market generally better for society than a monopolistic market?arrow_forwardApple faces competition from many other firms in the world market for mobile phones; therefore, Apple cannot have market power. Do you agree with this statement?arrow_forward
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