c) Which effect dominates, the price effect or the quality effect of a price change if demand is upward sloping? d) Why might demand be downward sloping in a market with imperfect information even though the market is otherwise perfectly competitive? e) Why are focal points important for noncooperative games?

c) Which effect dominates, the price effect or the quality effect of a price change if demand is upward sloping? d) Why might demand be downward sloping in a market with imperfect information even though the market is otherwise perfectly competitive? e) Why are focal points important for noncooperative games?

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 5CQQ

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Question

Subject: Manegerial economics & policy

c) Which effect dominates, the price effect or the quality effect of a price change if demand is
upward sloping?

d) Why might demand be downward sloping in a market with imperfect information even
though the market is otherwise perfectly competitive?

e) Why are focal points important for noncooperative games?

Definition Definition Structure of the market that exists when many buyers and sellers exchange similar commodities and prices are fixed by market forces, demand, and supply. When there is perfect competition, a single business cannot impact the price or market value of the homogenous product.

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