Capturesque Pricing High Low High 11, 11 2, 18 eing Low 18, 2 10, 10 ower-left cell shows that if Padmania prices low and Capturesque prices high, Padmania will earn a profit of $18 million, and earn a profit of $2 million. Assume this is a simultaneous game and that Padmania and Capturesque are both profit-maximizing s high, Capturesque will make more profit if it chooses a price, and if Padmania prices low, Capturesque will make more profit if price. ces high, Padmania will make more profit if it chooses a price, and if Capturesque prices low, Padmania will make more profit if price. the information given, pricing high a dominant strategy for both Padmania and Capturesque. : collude, what strategies will they end up choosing?

Aside from advertising, how can monopolistically competitive films increase demand for their products?

Does each individual in a prisoners dilemma benefit more from cooperation or from pursuing self-interest? Explain briefly.

What is predatory pricing? How might it reduce competition, and why might it be difficult to tell when it should be illegal?

What is the relationship between product differentiation and monopolistic competition?

Suppose that, due to a successful advertising campaign, a monopolistic competitor experiences an increase in demand for its product. How will that affect the price it charges and the quantity it supplies?

When OPEC raised the price of oil dramatically in the mid-1970s, experts said it was unlikely that the cartel could stay together over the long term-that the incentives for individual members. to cheat would become too strong. More than fort),r years later, OPEC still exists. Why do you think OPEC has been able to beat the odds and continue to collude? Hint: You may wish to consider non-economic reasons.

Suppose the market for Hula Hoops is monopolized by a single firm. a. Draw the initial equilibrium for such a market. b. Now suppose the demand for Hula Hoops shifts outward slightly. Show that, in general (contrary to the competitive case), it will not be possible to predict the effect of this shift in demand on the market price of Hula Hoops. c. Consider three possible ways in which the price elasticity of demand might change as the demand curve shifts: It might increase, it might decrease, or it might stay the same. Consider also that marginal costs for the monopolist might be increasing, decreasing, or constant in the range where MR=MC Consequently, there are nine different combinations of types of demand shifts and marginal cost slope configurations. Analyze each of these to determine for which it is possible to make a definite prediction about the effect of the shift in demand on the price of Hula Hoops.

If you were developing a product (like a web browser) for a market with significant barriers to entry, how would you try to get your product into the market successfully?

For many years, the Justice Department has tried to break up large firms like IBM, Microsoft, and most recently Google, on the grounds that their large market share made them essentially monopolies. In a global market, where U.S. films compete with firms from other countries, would this policy make the same sense as it might in a purely domestic context?