Microeconomics
Microeconomics
10th Edition
ISBN: 9781259655500
Author: David C Colander
Publisher: McGraw-Hill Education
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Chapter 15, Problem 4IP
To determine

The way in which the US economy would differ today if Standard Oil has not been broken up.

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The diagram below illustrates the change in market equilibrium in the global oil market due to a demand shock, with the demand curve shifting from Demand to Demand'. Supply of oil is provided by OPEC countries, as part of a cartel agreement, and other countries outside the cartel, P. P. Demand Demand Quantity, Q Q Q. Which of the following statements is/are correct? global a) If more countries joined OPEC, and reduced the quantity of oil that they produced as a cartel, it is possible that market oil price could stay the same depending on other market dynamics. b) The price of oil in the global market is fixed by the members of the OPEC cartel. c) If there is increased production of oil in a non-OPEC country when demand is at Demand' there would be a reduction in price from P1, ceteris paribus.
The South American cocaine industry consists of several “families” that obtain the raw material, refine it, and distribute it to the USA. There are only about three large families, but there are several small families. What market structure does the industry most resemble? What predictions based on the market structures can be made about the cocaine business? How do you explain the lack of wars among the families?
Two car manufacturers, Nissa and Honda, have fixed costs of $1 billion and marginal costs of $10,000 per car. If Nissan produces 500,000 cars per year and Honda produces 200,000 cars per year, calculate the average production cost for each company.Average production cost for Nissan: $ .Average production cost for Honda: $ .On the basis of these costs, which company's market share do you think will grow in relative terms? Honda or Nissan?
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