1. Smart and Ferrari are both car firms. How do you think these firms differ in the way they go about conducting their business or are they actually very similar in lots of ways? 2. How might the pricing policies of Smart and Ferrari differ? 3. What sort of market structure do Smart and Ferrari operate in? How might these market structures affect the behaviour of the respective firms? 4. Explain the relevance of average, marginal and total costs to firms such as Ferrari and Smart. 5. Which do you think is more likely to benefit from economies of scale - Ferrari or Smart? Explain.
1. Smart and Ferrari are both car firms. How do you think these firms differ in the way they go about conducting their business or are they actually very similar in lots of ways? 2. How might the pricing policies of Smart and Ferrari differ? 3. What sort of market structure do Smart and Ferrari operate in? How might these market structures affect the behaviour of the respective firms? 4. Explain the relevance of average, marginal and total costs to firms such as Ferrari and Smart. 5. Which do you think is more likely to benefit from economies of scale - Ferrari or Smart? Explain.
Chapter15: Oligopoly And Strategic Behavior
Section: Chapter Questions
Problem 12P
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![1. Smart and Ferrari are both car firms. How do you think these firms differ in the way
they go about conducting their business or are they actually very similar in lots of ways?
2. How might the pricing policies of Smart and Ferrari differ?
3. What sort of market structure do Smart and Ferrari operate in? How might these market
structures affect the behaviour of the respective firms?
4. Explain the relevance of average, marginal and total costs to firms such as Ferrari and
Smart.
5. Which do you think is more likely to benefit from economies of scale - Ferrari or Smart?
Explain.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb71e4a6-2079-40bc-8832-81ed991f4f72%2Ff122fbc0-298b-4366-8b99-c2752c9cb25f%2F1ok8mlw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. Smart and Ferrari are both car firms. How do you think these firms differ in the way
they go about conducting their business or are they actually very similar in lots of ways?
2. How might the pricing policies of Smart and Ferrari differ?
3. What sort of market structure do Smart and Ferrari operate in? How might these market
structures affect the behaviour of the respective firms?
4. Explain the relevance of average, marginal and total costs to firms such as Ferrari and
Smart.
5. Which do you think is more likely to benefit from economies of scale - Ferrari or Smart?
Explain.
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