Suppose Eckard Pharmacy is the only pharmacy in a particular market, but CVS Pharmacy is thinking about entering the market. Absent entry, Eckerd Pharmacy can maximize profits by producing a small quantity. However, by producing a large quantity, Eckerd Pharmacy can attempt to deter entry by reducing prices and, consequently, profits. Eckerd Pharmacy must choose how much to produce first and then CVS Pharmacy will choose whether to enter the industry. The strategies and comesponding profits for Eckerd (E) and CVS Pharmacy (C) are depicted in the decision tree to the right. What is the Nash equilibrium of the game? OA. Eckerd Pharmacy will choose the small quantity and CVS Pharmacy will not enter. OB. Eckerd Pharmacy will choose the large quantity and CVS Pharmacy will enter OC. Eckerd Pharmacy will choose the large quantity and CVS Pharmacy will not enter. OD. Eckerd Pharmacy will choose the small quantity and CVS Pharmacy will enter Small Quantity Large Quantity C С Enter Stay Out Enter Stay Out E: $45 C: $45 E: $80 C: 50 E: SO C-55 E: $66 C: 50 odo

How does oligopoly effect the pharmaceutical industry?

If a monopolistically competitive firm is earning positive profits in the short-run, then we would expect more competition to enter the industry assuming there are no barrier to entry in the market: True or False

The following are excerpts from the article: Stirring the Pot . $80 Coffee Beans – Yikes! Bangor Times. May 22nd, 2016. “ The Third Wave in coffee refers to the growth of small, independent coffee roasters who developed as an alternative to Starbucks when that company grew and disaffected coffee drinkers looked for alternative sources for their caffeinated drinks." "...companies of this type provide a relatively small clientele with great tasting coffees and verified attributes in the sourcing of coffee beans- organic, shade- grown, bird friendly, direct trade (it's better than fair trade), single-farm sourced, etc". "For a Third Wave coffee company, the goal is to satisfy existing consumer interest or create new consumer interest in attributes that its customers believe only that company can offer." "...firms are always trying to create new and better differentiation to set themselves apart from those who have been successfully earning monopoly profits. This very phenomenon is seen as…

Suppose 2 gas stations must post their prices for regular gasoline at 6am each morning and cannot change their price during the day. Each gas station has a choice: charge a relatively “low” price or charge a relatively “high” price.  The following shows their profit for the day of each gas station depending upon which price each gas station chooses:   Gas Station  B     Low Price High Price Gas Station A Low Price $2000, $900 $500, $1500   High Price $1200, $1800 $300, $2100 Assume that this is a "one shot" game: 4. Does this game represent a prisoner’s dilemma situation? Why or why not? 5. If the gas stations can talk the night before making their pricing decision and discuss their pricing strategies, what pricing strategy would each gas station choose the next morning?  Assuming both gas stations act rationally, what will be the outcome of the game?  Explain.

The following graph illustrates Demand, Marginal Revenue and cost curves for GeneTech firm which produces vaccine. In which market structure is this firm operating, monopoly or Perfect competition? How do you know? How many vaccines should GeneTech produce to maximize its profit? How do you know? Explain your answer. What price should GeneTech charge for its vaccine to maximize its profit?

Q2: You have a small decoration business primarily making custom paper mache pinata's. Monopolistic Competition. Each customer has unique custom order, therefore it is very difficult to figure out the marginal cost of each output. You charge a price of $15 for any small two foot by two foot pinata's. Without marginal cost, how can you check to see if the small pinata's were profitable?

Suppose 2 gas stations must post their prices for regular gasoline at 6am each morning and cannot change their price during the day. Each gas station has a choice: charge a relatively “low” price or charge a relatively “high” price.  The following shows their profit for the day of each gas station depending upon which price each gas station chooses:   Gas Station  B     Low Price High Price Gas Station A Low Price $2000, $900 $500, $1500   High Price $1200, $1800 $300, $2100 Assume that this is a "one shot" game: Which strategy should Gas Station A choose? Is it a dominant strategy? Explain why or why not. Which strategy should Gas Station B choose? Is it a dominant strategy? Explain why or why not What is the outcome for each Gas Station?  How much profits will each Gas Station earn? Explain. Does this game represent a prisoner’s dilemma situation? Why or why not? If the gas stations can talk the night before making their pricing decision and discuss their pricing…