Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 17, Problem 1IAPA
Washtenaw Dairy in Ann Arbor, Michigan, sells 63 flavors of Strohs Mooney’s ice cream, and Ben and Jerry’s Web site also lists 63 different flavors of ice cream. These numbers are similar to the varieties of smartphones sold by Samsung, Nokia, and Motorola. Toyota makes only 16 varieties of vehicles and Boeing makes 16 varieties of airplanes. Why is there more variety in smartphones and ice cream than in automobiles and airplanes?
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Ilsia is driving home from work. She needs to buy gas and notices an Exxon-Mobil station on one side of the street and a Shell station on the other side of the street. Although run by different companies, the two stations sell gasoline at the same price.
a. The most likely reason that the price is the same is that
drivers need gas and are willing to pay whatever price a gas station charges.
consumers view gasoline from different gas stations as perfect substitutes.
government regulation requires both gas stations to charge the same price.
gas stations always make a profit, so they can charge any price they want.
b. If one station increases its price,
it will make a higher profit.
it will lose customers to the cheaper station across the street.
it will be fined by the government.
it will sell more gasoline.
Most smartphones in the United States use Apple's IOS or Google's Android operating system. What market structure applies to the market for smartphone operating systems? Why?
The following table contains different consumers' values for three software titles: PowerPoint, Excel, and
Word. Suppose there are 100 consumers of each type. It costs Microsoft $0 to produce each piece of
software.
Consumer Types
Administrative Assistants
Marketing/Sales
PowerPoint
Excel
Word
$76
$100
$200
$200
$100
$125
Accountants
$25
$250
$25
A la carte pricing
If Microsoft were to sell each of the software individually, what price should it set for each and what
would its profits on each be?
PowerPoint
Excel
Word
Price per each
%24
2$
%24
Profit on just that software
Total profit on all software
Chapter 17 Solutions
Foundations of Economics (8th Edition)
Ch. 17 - Prob. 1SPPACh. 17 - Prob. 2SPPACh. 17 - Prob. 3SPPACh. 17 - Prob. 4SPPACh. 17 - Prob. 5SPPACh. 17 - Prob. 6SPPACh. 17 - Prob. 7SPPACh. 17 - Prob. 8SPPACh. 17 - Prob. 9SPPACh. 17 - Prob. 10SPPA
Ch. 17 - Washtenaw Dairy in Ann Arbor, Michigan, sells 63...Ch. 17 - Prob. 2IAPACh. 17 - Prob. 3IAPACh. 17 - Prob. 4IAPACh. 17 - Prob. 5IAPACh. 17 - Use the following information to work Problems 5...Ch. 17 - Prob. 7IAPACh. 17 - Prob. 8IAPACh. 17 - Prob. 9IAPACh. 17 - Prob. 1MCQCh. 17 - Prob. 2MCQCh. 17 - Prob. 3MCQCh. 17 - Prob. 4MCQCh. 17 - Prob. 5MCQCh. 17 - Prob. 6MCQCh. 17 - Prob. 7MCQ
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