In perfect competition, imitators dampen the innovating spirit of innovators. Explain.
Answer to relevant QuestionsInevitably, a firm in monopolistic competition ends up producing where its ATC curve is tangent to its demand curve. Explain. Suppose the cost schedule for a perfectly competitive firm producing brooms is: If the market price is $5, how many brooms would the firm produce? Would the firm be making economic profit? How could you tell if the firm is ...Why is game theory useful in describing the behavior of firms in oligopoly? According to game theorists, do oligopoly prices tend toward equilibrium? Why, or why not? What is price discrimination? Why would a firm want to price discriminate? Cite examples. Lean Cuisine and Healthy Choice can charge either $4 or $2 for their microwave-ready, frozen diet foods. Using the accompanying payoff matrix, and assuming for each a pricing strategy that avoids the worst-case scenario, ...
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