« previous next »

Author Question: What is the aspect of imperfect competition that is most distinct from perfect competition? A) ... (Read 80 times)

clmills979

  • Hero Member
  • *****
  • Posts: 551
on: Jul 1, 2018
What is the aspect of imperfect competition that is most distinct from perfect competition?
 
  A) free entry/exit
  B) perfect information
  C) differentiated products
  D) zero profits

Question 2

Suppose market demand is p = 10 - Q. Firms have a fixed entry cost of 5 and no marginal cost. If firm A is the incumbent, can it deter the entry of its rival, firm B?
 
  What will be an ideal response?
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


wshriver

  • Sr. Member
  • ****
  • Posts: 318
Reply #1 on: Jul 1, 2018
Answer to Question 1

C

Answer to Question 2

Firm B's reaction function is qB = 5 - (1/2)qA. The Stackelberg leader quantity is 5 and firm B will produce 2.5. Firm A's profit is 12.5. If firm A produces 6 units for example, firm B's best response is 2 units; however, it would incur a loss and not enter. Firm A's profits by preventing entry would be 24. Thus, firm A can deter entry by overproducing.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Approximately one in four people diagnosed with diabetes will develop foot problems. Of these, about one-third will require lower extremity amputation.

Did you know?

Vital signs (blood pressure, temperature, pulse rate, respiration rate) should be taken before any drug administration. Patients should be informed not to use tobacco or caffeine at least 30 minutes before their appointment.

Did you know?

Earwax has antimicrobial properties that reduce the viability of bacteria and fungus in the human ear.

Did you know?

Persons who overdose with cardiac glycosides have a better chance of overall survival if they can survive the first 24 hours after the overdose.

Did you know?

Acute bronchitis is an inflammation of the breathing tubes (bronchi), which causes increased mucus production and other changes. It is usually caused by bacteria or viruses, can be serious in people who have pulmonary or cardiac diseases, and can lead to pneumonia.

Right Hand from the Palmar Aspect Right Hand from the Palmar Aspect
An open chamber MRI may be more comfortable for the patient, but images may not be as distinct. An open chamber MRI may be more comfortable for the patient, but images may not be as distinct.
(A) Pinch along jaw line from midline to lateral aspect. (B) Press St-6 at masseter attachment. (A) Pinch along jaw line from midline to lateral aspect. (B) Press St-6 at masseter attachment.
Perfect logistic curves Perfect logistic curves
Enlarged aspect of olfactory receptors Enlarged aspect of olfactory receptors
Perfect Cubes Perfect Cubes
Video: Dendrite Animation

For a complete list of videos, visit our video library