Problem 1
Identify whether each of the following markets has few or many producers, and uniform or differentiated products. Which market is an oligopoly? Which market is monopolistically competitive? \([\mathrm{LO} 15.1]\) a. College education. b. Retail gas market.
Problem 2
Match the statement about goods sold in a market with the market type. [LO 15.1\(]\) a. There are imperfect substitutes for the goods. b. There are no substitutes for the goods. c. The goods may or may not be standardized.
Problem 7
For which product would you expect producers to have a stronger reaction to a ban on advertising: music artists or fast-food burgers? Explain your answer. [LO 15.5\(]\)
Problem 12
Suppose Warner Music and Universal Music are in a duopoly and currently limit themselves to 10 new artists per year. One artist sells 2 million songs at \(\$ 1.25\) per song. However, each label is capable of signing 20 artists per year. If one label increases the number of artists to 20 and the other stays the same, the price per song drops to \(\$ 0.75,\) and each artist sells 3 million songs. If both labels increase the number of artists to 20 , the price per song drops to \(\$ 0.30,\) and each artist sells 4 million songs. [LO 15.7\(]\) a. Fill in the revenue payoffs for each scenario in Figure \(15 \mathrm{P}-6 .\) b. If this game is played once, how many artists will each producer sign, and what will be the price of a song? c. If this game is played every year, how many artists will each producer sign, and what will be the price of a song?
Problem 13
Suppose a new product is developed and is supplied by a monopolist with a patent. Compared with the monopoly outcome, indicate whether consumer surplus, producer surplus, and total surplus increase, decrease, or remain the same under the following scenarios. [LO 15.8] a. Another producer creates a similar product and colludes with the original producer. b. Another producer creates a similar product and competes with the original producer. c. The patent expires.
