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What is a “natural monopoly”?
a) Why is it the case that the market system cannot deliver a sustainable competitive equilibrium in the case of a “natural monopoly”.
b) What, in your view is likely to be the most attractive option for how the government should deal with cases of natural monopoly?
c) Why does this option strike you as more attractive than the other options you can think of?
In this problem, you will be asked to derive the block-pricing scheme that maximizes profit in the case of 2nd-degree price discrimination when a monopolist faces a consumer with high demand PH = 80 − QH, a consumer with low demand PL = 50 − QL, and ..
consider a market where demand is p10-2q and supply is pq2. there is a consumption positive externality of 2.5unit of
Given the following total profit function: π = 144X - 3X^2 - XY -2Y^2 + 120Y -35 1. Determine the level of output of each commodity at which the firm maximizes its total profit 2. Determine the value of total profit at the maximum output level
Discuss Explain how "Game Theory" can be used to improve strategic decision making in competitive situations.
What could firm A do to make its threat credible without building excess capacity? Will firm A use the low price as a threat if firm B enters?
Below are the forecasted gross margins for company A's foreign subsidiary. As CFO, you are forecasting a 25% devaluation of the local currency. Please calculate the subsidiary's local currency exposure and its potential loss in the event of a 25% dev..
Suppose the following system of equations for a product: Solve for the socially efficient equilibrium. When P=30, what will be happening to the market? Explain.
Can you give 2 examples of of people who work part time for economic reasons and 2 examples of people who work part time for non economic reasons?
Suppose that the tax of $28 is levied on each item sold by a monopolist, and as a result, it decides to raise its price by exactly $28. Why might this decision be against its own best interests?
Smith likes cashews better than almonds and likes almond better than walnuts. He likes pecans equally as macadamia nuts and prefers macadamia nuts to almonds. Assuming his preferences are transitive, which does he prefer:
Imagine the number of unemployed is 6,135 and the number of employed is 27,433. Then, 3,225 people that were considered unemployed become discouraged and stop looking for a job. What would be the change in the unemployment rate as a resul of this?
Elucidate use blue points (circle symbol) to plot the federal debt as a percentage of nominal GDP for each of the six years.
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