MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
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Chapter 16, Problem 2QE
To determine
Monitoring problem and the incentive compatible contract.
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Chapter 16 Solutions
MICROECONOMICS
Ch. 16.1 - Prob. 1QCh. 16.1 - Prob. 2QCh. 16.1 - Prob. 3QCh. 16.1 - Prob. 4QCh. 16.1 - Prob. 5QCh. 16.1 - Prob. 6QCh. 16.1 - Prob. 7QCh. 16.1 - Prob. 8QCh. 16.1 - Prob. 9QCh. 16.1 - Prob. 10Q
Ch. 16 - Prob. 1QECh. 16 - Prob. 2QECh. 16 - Prob. 3QECh. 16 - Prob. 4QECh. 16 - Prob. 5QECh. 16 - Prob. 6QECh. 16 - Prob. 7QECh. 16 - Prob. 8QECh. 16 - Prob. 9QECh. 16 - Prob. 10QECh. 16 - Prob. 11QECh. 16 - Prob. 12QECh. 16 - Prob. 1QAPCh. 16 - Prob. 2QAPCh. 16 - Prob. 3QAPCh. 16 - Prob. 4QAPCh. 16 - Prob. 5QAPCh. 16 - Prob. 6QAPCh. 16 - Prob. 1IPCh. 16 - Prob. 2IPCh. 16 - Prob. 3IPCh. 16 - Prob. 4IPCh. 16 - Prob. 5IPCh. 16 - Prob. 6IPCh. 16 - Prob. 7IPCh. 16 - Prob. 8IPCh. 16 - Prob. 9IPCh. 16 - Prob. 10IPCh. 16 - Prob. 11IP
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- It is often said that a competitive market is more beneficial for the consumers as compared to the monopoly market. Why ? Explain.arrow_forwardWhat is the difference between price-fixing and predatory pricing? How do governments discourage firms from engaging in such practices?arrow_forwardExplain the concept of black marketing as a direct consequence of price ceiling in economics?arrow_forward
- Under pure monopoly market (PMM), MR=MC but not equal to Price. Why is this so? And what is the welfare effect of this? Please explain the negative effect to the consumers when MR is NOT EQUAL to Price?arrow_forwardAssume that you are an economic consultant. The firm that hired you has provided the information below. The firm is a price searcher and wants to maximize its profit (or minimize its loss). InformationPrice: $4Elasticity of demand at price of $4 is Ed=-1Quantity of output: 2000Total variable cost: 4000Average fixed cost: 1Marginal cost is constant and equal to the average variable cost: MC=ACV=2. Which of the following answers correctly describes this case? a) The firm is maximizing profits at the current price of $4.b) The firm should increase price and reduce quantity produced.c) None of the other answersd) Firm should reduce price and increase quantity produced.arrow_forwardWhat does marginal mean ? Can you give an example on why this term is crucial concept in economics discussion of behavior of consumer and supplier.arrow_forward
- Assume the supply curve of the typical taxi cab driver in Chicago is P = 4 + 2Q. Suppose the market price is P = 12. Assume cab drivers, sellers of taxi services the in Chicago are regulated by a municipal authority. The regulatory authority charges the sellers a “license fee” that must be paid in order to obtain a license to operate a cab. What is the maximum license fee the regulators can charge? Use the concept of the “seller’s surplus” to answer the question.arrow_forwardKeep in mind the case study of Uber taxi industry. Analyze the competitive structure of the taxi market, as it existed in a representative major metropolitan market such as New York prior to the introduction of Uber? Where does economic power in the industry reside?arrow_forwardWhy might a service business be more selective than a goods-producingbusiness regarding the customers it pursues or accepts?arrow_forward
- Exercise 3.1 A publisher must take a decision on the pricing of a new book based on the following demand estimates: Price 100 90 80 70 60 50 40 30 20 10 0 Number of copies demanded 0 100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000 1 000 000 According to his contract, the writer gets two million euros for writing the book and the marginal cost of publishing the book is constant at €10 per book. a) Calculate the total income, total cost and profit corresponding to each amount. How many books would a profit-maximizing publisher print? What price would she charge? (b) Calculate the marginal revenue. What is the difference between marginal revenue and price? Explain your answer. c) Draw the curves of marginal revenue, marginal cost and demand. For what output level does the marginal revenue curve cut the marginal cost curves? What does that mean?arrow_forwardExplain the features of the monoploy market in the economomyarrow_forwardWhich of the following definitions best describes price fixing? Price fixing occurs when a company promises to give another company a contract for goods or services. Price fixing occurs when firms charge a very high price for items that do not cost the firm very much to produce or supply. Price fixing occurs when a company charges very high prices in the beginning for a good or service, but gradually lowers the price over time. Price fixing occurs when businesses come together and agree on prices to charge consumers.arrow_forward
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