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

Author Question: What determines how much market power a firm has? What will be an ideal ... (Read 137 times)

c0205847

  • Hero Member
  • *****
  • Posts: 531
on: Jun 29, 2018
What determines how much market power a firm has?
 
  What will be an ideal response?

Question 2

Why is a consumer's satisfaction maximized when the marginal benefit from the last dollar spent on one good is equal to the marginal benefit from the last dollar spent on another good?
 
  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

Christopher

  • Sr. Member
  • ****
  • Posts: 316
Reply #1 on: Jun 29, 2018
Answer to Question 1

The extent to which a firm can exercise market power is limited by the ease with which consumers can substitute for its product.

Answer to Question 2

The marginal benefit from each additional dollar spent should be equal across various goods in order to maximize overall well-being. If these marginal units (last units) of satisfaction are not equal, then the consumer can be made better off by shifting consumption toward the good that yields more satisfaction at the margin. Hence, equilibrium occurs at the point where satisfaction from the last dollar spent is equal for all goods. This is the reasoning behind the old phrase getting the most bang for the buck.


c0205847

  • Member
  • Posts: 531
Reply 2 on: Jun 29, 2018
Gracias!

vickybb89

  • Member
  • Posts: 347
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

Did you know?

IgA antibodies protect body surfaces exposed to outside foreign substances. IgG antibodies are found in all body fluids. IgM antibodies are the first type of antibody made in response to an infection. IgE antibody levels are often high in people with allergies. IgD antibodies are found in tissues lining the abdomen and chest.

Did you know?

The Babylonians wrote numbers in a system that used 60 as the base value rather than the number 10. They did not have a symbol for "zero."

Did you know?

Medication errors are more common among seriously ill patients than with those with minor conditions.

Did you know?

In 1886, William Bates reported on the discovery of a substance produced by the adrenal gland that turned out to be epinephrine (adrenaline). In 1904, this drug was first artificially synthesized by Friedrich Stolz.

A single crossover inserts F at a specific locus, which then determines the order of gene transfer A single crossover inserts F at a specific locus, which then determines the order of gene transfer
Common sites of amputation. (A) Upper extremities. (B) Lower extremities. The surgeon determines th Common sites of amputation. (A) Upper extremities. (B) Lower extremities. The surgeon determines th
Tag identify that the power has been removed and service work is being done. Tag identify that the power has been removed and service work is being done.
Terminals 85 and 86 represent the coil inside the relay. Terminal 30 is the power terminal, 87a is ... Terminals 85 and 86 represent the coil inside the relay. Terminal 30 is the power terminal, 87a is ...
Social Problems: A Critical Power-Conflict Perspective Social Problems: A Critical Power-Conflict Perspective
Power Grip and Precision Grip Power Grip and Precision Grip
Video: Physiology of Asthma

For a complete list of videos, visit our video library