This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Game theory is a tool for studying competitive behavior between firms in monopolistic competition ... (Read 75 times)

fbq8i

  • Hero Member
  • *****
  • Posts: 527
on: Jun 29, 2018
Game theory is a tool for studying competitive behavior between firms in monopolistic competition because of the mutual interdependence among the firms.
 
  Indicate whether the statement is true or false

Question 2

Because the price of a diamond is much greater than the price of a gallon of water, the consumer surplus from diamonds is greater than the consumer surplus from water. Is the previous analysis CORRECT? Explain your answer.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

livaneabi

  • Sr. Member
  • ****
  • Posts: 328
Reply #1 on: Jun 29, 2018
Answer to Question 1

FALSE

Answer to Question 2

No, the analysis is incorrect. The paradox of value points out the error. Diamonds are scarce, so they have a high price and a high marginal utility. Water is abundant, so it has a low price and a low marginal utility. But the total utility from water (vastly) exceeds that from diamonds and so the consumer surplus from water (vastly) exceeds that from diamonds.


fbq8i

  • Member
  • Posts: 527
Reply 2 on: Jun 29, 2018
Gracias!

juliaf

  • Member
  • Posts: 344
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Pubic lice (crabs) are usually spread through sexual contact. You cannot catch them by using a public toilet.

Did you know?

Bacteria have been found alive in a lake buried one half mile under ice in Antarctica.

Did you know?

The term pharmacology is derived from the Greek words pharmakon("claim, medicine, poison, or remedy") and logos ("study").

Did you know?

Common abbreviations that cause medication errors include U (unit), mg (milligram), QD (every day), SC (subcutaneous), TIW (three times per week), D/C (discharge or discontinue), HS (at bedtime or "hours of sleep"), cc (cubic centimeters), and AU (each ear).

Did you know?

Certain rare plants containing cyanide include apricot pits and a type of potato called cassava. Fortunately, only chronic or massive ingestion of any of these plants can lead to serious poisoning.

Cranial Nerves Memory Tool Cranial Nerves Memory Tool
A typical large tool box, showing just one of many drawers. A typical large tool box, showing just one of many drawers.
A water spray bottle is an excellent diagnostic tool to help find an intermittent engine misfire ... A water spray bottle is an excellent diagnostic tool to help find an intermittent engine misfire ...
What is the contribution of studying wing spot in the field? What is the contribution of studying wing spot in the field?
What is the contribution of studying wing spot in the field? What is the contribution of studying wing spot in the field?
Mutations in the MAOA gene cosegregate with aggressive behavior Mutations in the MAOA gene cosegregate with aggressive behavior
Video: Lipid catabolism - lipolysis and beta oxidation and oxidation of fatty acids

For a complete list of videos, visit our video library