Costs and Revenues Chapter 12

1. With appropriate examples, define short run and long run.
2. One of the fundamental assumptions of perfect competition is free entry and exit of firms. With an example, explain how this assumption leads to all firms under perfect competition making normal profit in the long run. You can receive 2 bonus points for correct graphical analysis.

Chapter 13

The following graph shows monopoly profit maximization. There are 6 points with a "?". Label these points. (Hint: You can either copy/paste this graph or draw a similar graph on a MS Word file).

Attached

Costs and Revenues

Chapter 14

Refer to the section "The Prevalence of Oligopoly" and review the formula for Herfindahl-Hirschman Index or HHI.

Assume an industry consists of six firms with the following market shares:

Firm Market Share (%)

A 12

B 24

C 14

D 22

E 20

F 8

Calculate HHI. How would this industry be characterized by the Justice Department guidelines?

Chapter 15

1. For each of the following situations, decide whether advertising is directly informative about the product or simply an indirect signal of its quality. Explain your reasoning.
2. Football great Peyton Manning drives a Buick in a TV commercial and claims that he prefers it to any other car.
3. McDonald's spends millions of dollars on an advertising campaign that proclaims: "I'm lovin' it."
4. Subway advertises one of its sandwiches by claiming that it contains 6 grams of fat and fewer than 300 calories.
5. Define product differentiation. Your textbook describes three important forms of product differentiation. Describe each form with examples.

Cours D21 Assign S Nation Login My AF D2L. DisCU Login Profil D21 Week D21 Cours 5 krugn Home Week Order EW X Untitl + C docs.google.com/document/d/1-4vFieMhbvu0XRby400Ye6UlmSX6Ba761KJtJ-wX1fU/edit# YouTube Maps M Gmail Week Three Homework (1) * 6 Share File Edit View Insert Format Tools Extensions Help Last edit was seconds ago 100% Normal text Times New... - 12 + B J U A . G P O . BEEBE X B . E . EEX 31 . 1 . 1 1 15 1 1 1 1 1 1 16 1 1 171 1 17 1 1 1 With an example, explain how this assumption leads to all firms under perfect competition making normal profit in the long run. You can receive 2 bonus points for correct graphical analysis. SUMMARY + Chapter 13 C OUTLINE The following graph shows monopoly profit maximization. There are 6 points with a "?". Label Headings you add to the document will these points. (Hint: You can either copy/paste this graph or draw a similar graph on a MS Word appear here. file). Costs and Revenues ? + O ? Q O + Sep 16 9:42 5 9 0