In this week’s discussion we focus on market competition and the power of firms to set prices.
(a) Along with your textbook reading, review the videos, blog, and articles on market competition. Then respond to the following questions: If all the firms in an industry are charging the same
Click the link to review a recent price-fixing case on bread.
(b) In your town or city try to find a local business that appears to enjoy some degree of
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- 6. Write short notes on Mercantilism Absolute Cost advantage theory Leontief Paradox Contract Marketingarrow_forwardSolve all this question......you will not solve all questions then I will give you down?? upvote....arrow_forwardThe following graph illustrates the market for small moving trucks in Eugene, OR, during Oregon's fall move-in week. PRICE (Dollars per small truck) 100 Demand 90 Supply 80 70 28 80 50 40 30 20 10 0 0 1 2 3 4 5 8 9 10 QUANTITY (Hundreds of small trucks) Suppose that Zoomba is one of over a dozen competitive firms in the Eugene area that offers moving truck rentals. Based on the preceding graph showing the weekly market demand and supply curves, the price Zoomba must take as given is Fill in the price and the total, marginal, and average revenue Zoomba eams when it rents 0, 1, 2, or 3 trucks during move-in week. Quantity (Trucks) Price Total Revenue (Dollars per truck) (Dollars) 0 1 2 3 Marginal Revenue (Dollars) Average Revenue (Dollars per truck) 0 The demand curve faced by Zoomba is identical to which of its other curves? Check all that apply. Supply curve Average revenue curve Marginal cost curve Marginal revenue curvearrow_forward
- Economics 1) How many buyers are there in a perfectly competitive market?A) FewB) TwoC) ManyD) One2) A market in which there are many buyers and sellers, every firm sells the same standardized product, buyers and sellers have full information about the product and its price, and it is easy for firms to enter and exit the market is known as _____ market.A) monopolyB) oligopolyC) duopolyD) a perfectly competitive3) Which of the following is NOT a reason that firms in a perfectly competitive market are price takers?A) There are many firms that a buyer can choose from.B) Each firm can sell more of its goods at a lower price than at the market price.C) Each buyer has perfect information about all alternatives.D) Each firm's good is a perfect substitute for another firm's good.arrow_forwardQuestion 4 Many companies reward their managers based on profits so that the managers will make decisions to maximize profits. However, some companies are paying their managers based on sales or revenue, instead of profits, so their managers will make decisions to maximize revenue. For example, at Reebok, the former CEO Paul Fireman received a nickel for every pair of shoes sold. a. Suppose that there are two existing firms in the market competing in quantity. Ignore market uncertainty and long-run competition. Firm B's manager is always paid based on firm B's profits. Firm A has been paying its manager based on profits but now changes to pay the manager solely based on revenue. Each manager chooses the production level (quantity) for his firm simultaneously. Is it possible for the above change in firm A's compensation system to increase firm A's profits? What are the direct effects and strategic effects on firm A's profit? Explain. Direct Effect (Circle one): Positive Negative…arrow_forwardWhen the number of competing firms is small in a market, is this market necessarily different from a perfectly competitive market in terms of market power and efficiency? Develop your in-depth analysis and argument on the basis of relevant economic theory or models. Also discuss and explain how market power can empirically and practically (from a competition policy point of view) be assessed.arrow_forward
- Identify an article from the Wall Street Journal within the last six weeks that relates to one of the following topics: (1) Factors in an organization's external environment that had an impact on the organization. (2) Factors in an organization's internal environment that had an impact on the organization. (3) An article that provides examples of an organization exploiting the resources of a competitor to strengthen its competitive advantage. First, Summarize the article Next, Discuss what you found interesting, educational, insightful, etc.? Then, Discuss how the article you found relates to the material you read for this week. Summarize your post. You should not type the questions, the discussion post should flow as one document. Think of my directions as writing prompts. Each paragraph needs at least 4-5 sentencesarrow_forwardWhat are the key trade offs of imperfect competition? Question 8 options: The monopolistically competitive market structure fails to achieve allocative efficiency, but the firms all face perfectly elastic demand curves. The monopolistically competitive market structure provides powerful incentives for innovation, but the strongest firms in a monopolistically competitive market become oligopolists. The monopolistically competitive market structure allows firms to achieve economic profit in the short run, but the individual firms all face perfectly elastic demand curves. The monopolistically competitive market structure provides powerful incentives for innovation, but they never achieve productive efficiency in the long run.arrow_forwardQ8. What role does the U.S. government play with respect to market competition? a.) It preserves competition by regulating prices and intervening in the price and output decisions of businesses. b.) It preserves competition by maintaining abundant government-owned firms to ensure consumer-friendly pricing. c.) It polices anticompetitive behavior and prohibits contracts that restrict competition.arrow_forward
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