Chapter 26: Q. 1 - For Critical Thinking (page 595)
In what sense is there oligopolistic interdependence in the basic dominant-firm model, in which there truly is just one single dominant firm? Explain your reasoning.
The large corporation can set a price that maximizes its profit.
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Why do we suppose that people with college degrees when earn high hourly incomes have been among the customers of online-dating firms that provide fewer high-quality matches?
Consider the following list, and classify each item according to the appropriate type of two-sided market-audience-making, matchmaking, shared input, or transaction-based-and write a one sentence answer justifying your classification. (Hint: You may wish to check out the firms' Web sites to assist in answering this question.)
a. Mastercard.com
b. FreeBSD.com
c. Plentyoffish.com
d. WSJ.com
Take a look at Figure 26-3. What is the total dollar amount of the typical perfectly competitive firm's economic incentive to join the proposed cartel, assuming that after the fact no firms cheat on the specified cartel agreement? Explain your reasoning.
What would be the revised HHI value if the top dozen firms decided to conduct a horizontal merger and offer a single "Top 12 Tablet" product?
Characterize each of the following as a positive-sum game, a zero-sum game, or a negative-sum game.
a. You play a card game in your dorm room with three other students. Each player brings \(to the game to bet on the outcome, winner take all.
b. Two nations exchange goods in a mutually beneficial transaction.
c. A thousand people buy \)1 lottery tickets with a single payoff of $.
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