10. Questionable business practices according to antitrust agencies Complete the following table by matching each of the scenarios to the concept of resale price maintenance, predatory pricing, or tying. Predatory Pricing Scenario SnapFace is a firm that manufactures polaroid cameras. Suppose SnapFace sells its polaroid cameras to online retailers for $159 each and requires those online retailers to charge at least $179 to shoppers for each polaroid camera. Breezy Hut is the only firm producing air conditioners. It costs $1,000 to produce one air conditioner, and Breezy Hut sells each air conditioner for $1,200. After Gregale, a new firm with the same costs as Breezy Hut, enters the market for air conditioners, Breezy Hut starts selling its air conditioners for a price of $550. Wally's sells a wide variety of skateboards to retail sporting good outlets. Wally's recently rolled out two new skateboards: a popular Dallas II and a much less popular Drydeck 3. Wally's requires Resale Price Maintenance Tying C

10. Questionable business practices according to antitrust agencies Complete the following table by matching each of the scenarios to the concept of resale price maintenance, predatory pricing, or tying. Predatory Pricing Scenario SnapFace is a firm that manufactures polaroid cameras. Suppose SnapFace sells its polaroid cameras to online retailers for $159 each and requires those online retailers to charge at least $179 to shoppers for each polaroid camera. Breezy Hut is the only firm producing air conditioners. It costs $1,000 to produce one air conditioner, and Breezy Hut sells each air conditioner for $1,200. After Gregale, a new firm with the same costs as Breezy Hut, enters the market for air conditioners, Breezy Hut starts selling its air conditioners for a price of $550. Wally's sells a wide variety of skateboards to retail sporting good outlets. Wally's recently rolled out two new skateboards: a popular Dallas II and a much less popular Drydeck 3. Wally's requires Resale Price Maintenance Tying C

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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8. Natural monopoly analysis The following graph shows the demand (D) for gas services in the imaginary town of Utilityburg. The graph also shows the marginal-revenue (MR) curve, the marginal-cost (MC) curve, and the average-total-cost (ATC) curve for the local gas company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. PRICE (Dollars per hundred cubic metres) 2 20 18 16 14 12 10 8 MR ATC MC 0 0 1 2 3 4 5 6 7 8 9 10 QUANTITY (Hundreds of cubic metres) D + Monopoly Outcome (? Which of the following statements are true about this natural monopoly? Check all that apply. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. The gas company is experiencing economies of scale. The gas company is experiencing diseconomies of scale. The gas company must own a scarce resource. True or False: Without government…
1) With monopoly, we only specify long run cost functions because we are not as interested in the shut down decision and we don't have firm entry to compete away profit. Still, to make the math work, our monopolist cost functions often have fixed costs. Let's solve the following question: EagleSOFT has developed a computer program that will send UNT sports teams scores directly to purchaser's phones as text messages. Demand and total cost for the software company is described by the following equations: Demand: P = 70 -0.05Q, Cost: C = 4000 + - 10Q. a) What is the firm's level of output, the price they should charge, and their profit? b) What is the demand elasticity and Lerner index at the level of output?
ft : 00:09:48 Resale price maintenance can prevent showrooming. True False In a successive monopoly structure, if distributor has a constant marginal cost of $5 and is paying the producer $12 per unit, which is the profit-maximizing wholesale price, what is the distributor's marginal revenue at this output level? $17 $12 $7 $5
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11. In a particular industry the minimum value of long run average cost is reached when a firm produces 1,000 units of output per period. At this output rate, long run average cost is $ı per unit of output. The market demand curve for this product is as follows: Price Quantity $3.00 1,000 8,000 12,000 20,000 2.00 1.00 .50 Is this industry a natural monopoly? Why or why not?
12: Suppose Vought International has a monopoly on "Supe" protective service plans. The inverse demand for protective service plans Q is p(Q) = 240 – 8Q while the cost of protective service plans is C(Q) = 2Q? (1) Find the number of plans Q Vought International chooses, and the corre- sponding price p. (2) How much deadweight loss does the monopoly create?