1. Some people say that if there is a monopoly producer they can charge any price they want and the buyers have no choice but to buy the product at that price. Explain if that is true by considering a monopoly airline.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

1. Some people say that if there is a monopoly producer they can charge any price they want and the buyers have no choice but to buy the product at that price. Explain if that is true by considering a monopoly airline. 

2. When you go to your dentist, she charges you the full price for your clean and shine but the dentist charges your grandmother (a senior citizen) a 20 percent discounted price for the same service. Explain why the dentist is able to make the price discrimination work. 

3. Even though everyone values clean air and wishes to breathe clean air, environmentalists and a large number of city dwellers would say that Canadian cities have excessive air pollution.

    • Explain why, if left to the free-market system, the problem of excessive air pollution would not be solved? 

    • Name another problem that would not be solved, if left to the free-market system.

    • Suppose someone makes the following statement in support of introducing barriers to trade for importing men’s clothing into Canada:

      The garment workers in the developing countries are barely paid a dollar an hour and no benefits, whereas the minimum wage in Canada is eight times or more high than that. It is obvious that we cannot compete with the cheap labour in those countries. Therefore, we should impose high enough tariffs for the imports from those countries to make a level playing field for our workers.

      • What are some of the reasons that workers in developing countries are paid less than Canadian workers? 

      • Explain why the argument presented is not a sound economic argument for trade protection.

Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Monopoly
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education