MICROECONOMICS W/ CONNECT
21st Edition
ISBN: 9781308196077
Author: McConnell
Publisher: MCG/CREATE
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Chapter 6, Problem 5DQ
To determine
Price discrimination .
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A statistical study estimated that the dental appliance market coexists with a Supply curve given by: O= 75.2+1.4P and a Demand curve given by: D= 446.2-1.1P, where P is the price of sale in real units and quantities in thousands of units. This study also indicated that the average prices practiced are 20% below equilibrium, which has encouraged the search for dental treatment. Considering that the market cannot supply all the customers who are looking for it, how many people will be without access to treatment while prices are below equilibrium?
In Problem 9, suppose that firm 2 acts as a price leader and can commit
in advance to setting its price once and for all. In turn, firm 1 will react
to firm 2’s price, according to the profit-maximizing response found
earlier, P1 =52.5+0.25P2. In committing to a price, firm 2 is contemplating
either a price increase to P2 = $73 or a price cut to P2= $67. Which
price constitutes firm 2’s optimal commitment strategy? Justify your
answer and explain why it makes sense.
1. When both Player 1 and Player 2 set their prices at $15 per hour, can Player 2 improve her situation by changing her price?
a. no
b. yes
c. cannot be determined with the given information
2.When both Player 1 and Player 2 set their prices at $15 per hour, which of the following occurs?
a. Both Player 1 and Player 2 want to change their actions.
b. Neither Player 1 nor Player 2 wants to choose a different action.
c. Player 1 wants to change her price to $10 per hour, but Player 2 still wants to charge $15 an hour.
d. Player 1 does not want to change and Player 2 does want to change.
3. What is Player 2 dominant strategy?
a. $10
b. $15
c. First charge $10 and then later switch to $15
d. Player 2 does not have a dominant strategy
4.The Nash equilibrium in the babysitter game is:
a.($10, $10)
b.($15, $15)
c.($15, $10)
d.($10, $15)
Chapter 6 Solutions
MICROECONOMICS W/ CONNECT
Ch. 6 - Explain why the choice between 1, 2, 3, 4, 5, 6,...Ch. 6 - Prob. 2DQCh. 6 - The income elasticities of demand for movies,...Ch. 6 - Research has found that an increase in the price...Ch. 6 - Prob. 5DQCh. 6 - Suppose that the total revenue received by a...Ch. 6 - Suppose that the total revenue received by a...Ch. 6 - Calculate total-revenue data from the demand...Ch. 6 - Prob. 4RQCh. 6 - 5. In 2006, Willem de Kooning’s abstract painting...
Ch. 6 - Suppose the cross elasticity of demand for...Ch. 6 - Look at the demand curve in Figure 6.2a. Use the...Ch. 6 - Prob. 2PCh. 6 - Graph the accompanying demand data, and then use...Ch. 6 - Danny Dimes Donahue is a neighborhoods 9-year-old...Ch. 6 - What is the formula for measuring the price...Ch. 6 - ADVANCED ANALYSIS Currently, at a price of 1 each,...Ch. 6 - Prob. 7P
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