Manifold Manufacturing, a large producer of motorcycle parts, is accused of monopolizing the market for a particular motorcycle part. Why would its legal defense team be so interested in a statistical estimate that the price elasticity of demand for its motorcycle part was 0.62?
What will be an ideal response?
A monopolist would never maximize its profits by producing along an inelastic section of the demand curve. The estimate of an inelastic demand is evidence that Manifold Manufacturing is not pricing the way a monopoly would price.
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Consider the simultaneous choice game represented by the matrix below where Player A chooses either Up or Down and Player B chooses either Left or Right.
i. Discuss whether or not either player has a dominant strategy.
ii. Identify the Nash equilibrium in the game and explain why you have concluded that it is a Nash Equilibria.
iii. Now imagine that the game could be played sequentially. If Player A gets to choose their strategy first, can they do better than in the sequential game than in the equilibrium from the simultaneous game? Explain.
Explain the difference between a change in demand and a change in quantity demanded. What leads to each of these changes?
What will be an ideal response?
Private saving refers to ________
A) after-tax income minus consumption expenditures B) a flow variable which adds to the stock of wealth C) the private saving rate times disposable income D) all of the above E) none of the above
The labor productivity speed-up in the United States could be explained by a delayed
a. educational benefit. b. technology benefit. c. military spending benefit. d. baby boom benefit.