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Microeconomics

Daron Acemoglu, David Laibson, John A. List

Chapter 15

Trade-offs Involving Time and Risk - all with Video Answers

Educators

Chapter Questions

Problem 1

How are the products sold by a monopolistically competitive firm different from the products sold in a perfectly competitive market?

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01:59

Problem 2

How is a monopolistically competitive market similar to a perfectly competitive market? Do monopolistically competitive markets and monopolies share any common features?

Kaylee Mcclellan
Kaylee Mcclellan
Numerade Educator
04:10

Problem 3

Both monopolies and monopolistically competitive firms set marginal revenue equal to marginal cost to maximize profit. Given the same cost curves, would you expect prices to be higher in a monopoly or a monopolistically competitive market?

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
02:43

Problem 4

Will a monopolistically competitive firm continue to operate in the short run despite earning negative economic profit? Explain your answer.

Daniel Cisneros
Daniel Cisneros
Numerade Educator

Problem 5

Monopolistically competitive firms earn zero economic profit in the long run as do perfectly competitive firms. Does this mean that total surplus is maximized in a monopolistically competitive market?

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Problem 6

What happens in a monopolistically competitive market with the entry of new firms?

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10:49

Problem 7

Consider a noncollusive duopoly model with both firms supplying bottled drinking water. The firms choose prices simultaneously. The marginal cost for each firm is $\$ 1.50$. The market demand is shown by the figure given below.
a. Find the residual demand curves for each of the firms.
b. What pricing strategy by each firm would be a Nash equilibrium in this model?
c. Find the Nash equilibrium when the two firms can collude effectively.

Md.Daniyal Arshad
Md.Daniyal Arshad
Numerade Educator

Problem 8

In the model of an oligopoly with identical (homogeneous) products, what is the price likely to be?

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03:01

Problem 9

How do oligopolistic firms that sell differentiated products determine their prices?

Ameer Said
Ameer Said
Numerade Educator
00:00

Problem 10

Suppose there are four firms in a market and each of them sells differentiated products. Does it make sense for these firms to engage in a price war? Why or why not?

Jennifer Stoner
Jennifer Stoner
Numerade Educator

Problem 11

. When is a collusive agreement between two firms likely to break down?

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01:25

Problem 12

Suppose the refrigerator industry has an $\mathrm{HHI}$ of 2,500 while the aluminum industry's $\mathrm{HHI}$ is 6,850 . Is this information sufficient to conclude that the aluminum market is more concentrated than the market for refrigerators? Explain your answer.

Jennifer Stoner
Jennifer Stoner
Numerade Educator
03:11

Problem 13

Decide whether each of the following statements is true or false for each of three different types of markets: perfect competition, monopoly, and monopolistic competition.
a. Firms equate price and marginal cost.
b. Firms equate marginal revenue and marginal cost.
c. Firms earn economic profits in the long run.
d. Firms produce the quantity that minimizes long-run average cost.
e. New firms are free to enter this industry.

Jennifer Stoner
Jennifer Stoner
Numerade Educator