Marginal cost, Managerial Economics

A firm in a perfectly competitive market invents a new situation of production that lowers its marginal costs.  What happens to its output? What happens to the price it charges? 

a. The firm has an employee who threatens to tell all other firms in the industry about how to execute this new method. Will it be possible to bribe the employee not to do this? Describe why or why not.

b. Why should this employee probably took to tell only some of the other firms rather than all of them?

 

Posted Date: 3/25/2013 6:10:10 AM | Location : United States







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