EBK ECONOMICS TODAY
18th Edition
ISBN: 9780133920116
Author: Miller
Publisher: YUZU
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Chapter 24, Problem dFCT
To determine
Reason for establishing single “world Price”.
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What is predatory pricing? How might it reduce competition, and why might it be difficult to tell when it should be illegal?
Why is monopoly considered as a price maker?
Why is price discrimination economically efficient for society as a whole but disadvantageous for buyers?
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- Who would be willing to pay more for the right to use the McDonald’s name—an out-let located in the center of Centerville, or one that would do the same amount of business at the interstate turnpike?arrow_forwardHow much is total surplus if the market is perfectly competitive?How much is total surplus if the market is controlled by a single price monopolist?Suppose the single price monopolist started charging all customers the maximum price they are willing to pay. How much additional surplus is created?arrow_forwardQ1: If only one airline service a town, does a monopoly exist? What about competition from other services? Q2: Suppose that you are an orange grower. Would you expect the demand for your orange to be more elastic or more inelastic? Why? Q3: Mr Han Cook says that marginal cost is just a funny name for average total cost. What do you think about this ideas? Q4: How prices reaches equilibrium? Give an example.arrow_forward
- Why might a service business be more selective than a goods-producingbusiness regarding the customers it pursues or accepts?arrow_forwardSuppose an investigation reveals that the prices charged for drinks at a tourist resort are significantly higher than the prices charged for the same drinks at hotels in the nearby village. What might the explanation for this situation be?arrow_forwardIn terms of perfect first-degree price discrimination, could you show that the firm's price of the last unit sold would equal the marginal cost of producing that unit and that the firm would produce the perfectly competitive level of output? If you can use a graph, that would help me understand thank you.arrow_forward
- Singer Britney Spears has a monopoly over a scarce resource: herself. She is the only person who can produce a Britney Spears concert. Does this fact imply that the Government should regulate the prices of her concerts? Why? Or why not?arrow_forwardIf the firm were to charge only individual prices, what prices should it set for its laptops to maximize profit? If the firm were to charge only individual prices, what prices should it set for its printers to maximize profit? How much more profit would the firm make if it sold laptops and printers together as a bundle?arrow_forwardSome 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?arrow_forward
- Suppose the local electrical company, a legal monopoly based on economies of scale, was split into four firms of equal size, with the idea that eliminating the monopoly would promote competitive pricing of electricity. What do you anticipate would happen to prices? Why?arrow_forwardU.S. pharmaceutical companies charge different prices for prescription drugs to buyers in different nations, depending on elasticity of demand and government-imposed price ceilings. Explain why these companies, for profit reasons, oppose laws allowing reimportation of their drugs back into the United States.arrow_forwardWhat quantity will the above monopolist produce if it can first degree price discriminate? (Enter a number) How much consumer surplus do consumers get in the above graph if the monopolist first degree price discriminates? (Enter a number) If the monopolist first degree price discriminates, will the quantity produced by the monopolist be allocatively efficient? (Enter: YES or NO)arrow_forward
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