« previous next »

Author Question: What is the aspect of imperfect competition that is most distinct from perfect competition? A) ... (Read 87 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?

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

Did you know?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Did you know?

Though Candida and Aspergillus species are the most common fungal pathogens causing invasive fungal disease in the immunocompromised, infections due to previously uncommon hyaline and dematiaceous filamentous fungi are occurring more often today. Rare fungal infections, once accurately diagnosed, may require surgical debridement, immunotherapy, and newer antifungals used singly or in combination with older antifungals, on a case-by-case basis.

Did you know?

Vaccines cause herd immunity. If the majority of people in a community have been vaccinated against a disease, an unvaccinated person is less likely to get the disease since others are less likely to become sick from it and spread the disease.

Did you know?

There are over 65,000 known species of protozoa. About 10,000 species are parasitic.

Succession in the intertidal zone involves colonization and competition for limited space among spec Succession in the intertidal zone involves colonization and competition for limited space among spec
A stallion with a proven competition record is one criterion for being a suitable sire. A stallion with a proven competition record is one criterion for being a suitable sire.
Tactile Fremitus, Using Ulnar Aspect of Closed Fist Tactile Fremitus, Using Ulnar Aspect of Closed Fist
(a) Male competition can be fierce. (b) This male baboon has bite wounds suffered in competition wit (a) Male competition can be fierce. (b) This male baboon has bite wounds suffered in competition wit
Biking competition in the park Biking competition in the park
Perfect Cubes Perfect Cubes
Video: Carbohydrate digestion (brush border enzymes, end products) & Carb absorption (fructose, galactose)

For a complete list of videos, visit our video library