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A. Market equilibrium requires that other influences other than price be held constant. Why might the existence of social and political forces violate this condition and make equilibrium difficult to achieve?
B. Do you think consumers make purchasing decisions based on general rules of thumb, such as "you get what you pay for" and "follow the leader," instead of price? Why or why not?
C. What implications do you think purchases made by rules of thumb have on how markets work? (Consider how following rules of thumb might affect demand and thus prices.)
the oil price schok of 1980 sent gasoline prices sharply higher. Coal prices moved in sympathy with oil prices, with the result, that coal companiesearned pure economic profits. Since coal is homogenous good and the market is competitive , what ha..
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Alfred Kahn, currently an economics professor at Cornell University, led the United States drive to deregulate airline industry as chairman of the Civil Aeronautics Board under President Jimmy Carter.
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(1)Compute the optimal prices, and the Lerner index and inverseelasticity of demand for each good. (2)Now suppose the goods are produced by two firms that chooseprices simultaneously. Compute the Nash equilibrium and compare
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