Learning Goal: I’m working on a micro economics question and need an explanation and answer to help me learn.Question1Next time you are shopping at the supermarket (or imagine you are there), what is a good example of a good (not a brand name) that is sold in an oligopoly market? What is the good? What are the major manufacturers (be sure to turn the package over so you are now confusing brand names with the manufacturer)? Which characteristics of an oligopoly market are shown here (few dominant producers; identical prices; high barriers to entry)?Question 2Based on your experience in your neighborhood, what is a good example of a good or service sold in a monopolistically competitive market? What is the good or service? Which characteristics of a monopolistically competitive market are shown here (many firms, differentiated products, low barriers to entry, low profits in long run, inefficient production)? Why? Which are not? Explain why.Question 3What are the relative advantages of buying a good or service produced by a firm in an oligopoly market structure versus the relative advantages of buying a good or service by a firm in a monopolistically competitive market structure? Use a real life examplesi n your answer (may be the same as in questions 1 and 2, or different).Question 4In the following matrix for the profits of two pizza firms with the decision whether or not to offer “free delivery” what is the dominant outcome. Explain why.You deliverYou don’t deliverRival deliversRival gets $3000You get $3000Rival gets $8000You get $2000Rival doesn’t deliverRival gets $2000You get $8000 Rival gets $6000You get $6000Question 5The following diagram from the textbook for a monopolistically competitive firm in the long run is probably the most complicated we studied this semester. A friend looks over your shoulder and asks “what is happening here?” In everyday language (not the fancy textbook language) explain the message in this diagram and how it might apply to his life.For any of the above questions you may substitute work with the calculus modules:Calculus option:For one of the questions above you may substitute work with calculus on “Monopoly” and “Monopolistic Competition” (see optional calculus module.) For each of these sections, show your answers to the problems and your work to find those answers. Then, for each section describe what you learned about: a) economics and b) calculus.PreviousNext
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