Problem 4
Why is a monopolist a price maker rather than a price taker?
Problem 5
Is it easier for a new firm to enter the market under monopolistic competition or oligopoly? Why?
Problem 5
Why do technological monopolies exist only for a limited time?
Problem 5
How is imperfect competition different from perfect competition?
Problem 7
In 2005 , the FTC approved the merger of The Gillette Company with Procter \& Gamble. Experts who reviewed the merger said it made sense that it was approved because the two companies had few products in the same market categories. In order to satisfy the government, the companies had to sell only two of their brands to other companies. What factors that affect mergers are illustrated in this story?
Problem 7
Analyzing Causes and Effects Companies that produce generic drugs are not required to repeat the clinical tests that the original manufacturer of the drug is required to run before the drug receives its patent. How does this fact affect the prices of generic drugs and why?
Problem 7
Suppose that you went to a farmers' market and found several different farmers selling cucumbers. Would you be likely to find a wide range of prices for cucumbers? Why or why not?
Problem 7
What makes the market for wheat different from the markets for products made from wheat, such as bread, cereal, and pasta?
Problem 8
In \(2005,\) a major U.S. automaker announced a new discount plan for its cars for the month of June. It offered consumers the same price that its employees paid for new cars. When the automaker announced in early July that it was extending the plan for another month, the other two major U.S. automakers announced similar plans. What market structure is exhibited in this story and what specific characteristics of that market structure does it demonstrate?
Problem 8
What would happen to a wheat farmer who tried to sell his wheat for \(\$ 2.50\) per bushel if the market price were \(\$ 2.00\) per bushel? Why?
