EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 12.4, Problem 1TTA
To determine
To describe:The appropriateness in adopting the practice of bid rigging over tacit collusion by Electric equipment manufacturers is to be identified.
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Please type your NUMERICAL answer in the space below. ENTER ONLY THE NUMBER. IF answers are in decimals,
please round the number to one decimal point.
Winterfell Cable TV pays $100,000 per year to earn exclusive rights to air a premium sports channel. There are two types
of subscribers in Winterfell: 3,000 die-hard sports fans who will pay as much as $200 a year for the new channel and
20,000 occasional sports viewers who will pay as much as $25 a year for a subscription to it.
a)
If Winterfell Cable is unable to price discriminate, what price will it charge and how much are its profits?
Price
Profits=
b)
If Winterfell Cable is able to price discriminate, how much will it make in profits?
Profits=
What is the deadweight loss associated with the nondiscriminating pricing policy compared to the price
c)
discriminating policy?
DWL=
Assume quantities need not be integers. Assume a profit maximizing monopolist with marginal cost MC(Q) = Q and fixed cost equal to $2 faces demand MWTP(Q) = 20 - 2Q. Assuming it must charge the same price for each unit it sells, what price does it choose?
Round to two decimal places and do not enter the currency symbol. If your answer is $1.125, enter 1.13.
If United Airlines acted as a "price leader" and all other airlines simply charged the same prices that United Airlines charged, then the Anti-Trust Department might consider this illegal because it is a form of "silent
collusion."
Multiple Choice
The U.S. Anti-Trust Department has always considered "silent collusion" as suspicious and it does consider this pricing strategy to be illegal.
There is no such term as "silent collusion" in microeconomics.
Matching the prices of the price leader is a good example of a competitive market.
The famous 1982 anti-monopoly IBM court case said that this pricing strategy within an industry is legal as long as the firms fill out quarterly reports to keep the U.S. Anti-Trust Department informed.
Chapter 12 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 12.2 - Prob. 1TTACh. 12.2 - Prob. 2TTACh. 12.2 - Prob. 1MQCh. 12.2 - Prob. 2MQCh. 12.2 - Prob. 1.1TTACh. 12.2 - Prob. 2.1TTACh. 12.2 - Prob. 1.1MQCh. 12.3 - Prob. 1MQCh. 12.3 - Prob. 2MQCh. 12.3 - Prob. 1TTA
Ch. 12.3 - Prob. 2TTACh. 12.3 - Prob. 1.1MQCh. 12.3 - Prob. 2.1MQCh. 12.3 - Prob. 1.1TTACh. 12.3 - Prob. 2.1TTACh. 12.4 - Prob. 1TTACh. 12.4 - Prob. 2TTACh. 12.5 - Prob. 1MQCh. 12.5 - Prob. 2MQCh. 12.5 - Prob. 1TTACh. 12.5 - Prob. 2TTACh. 12.6 - Prob. 1MQCh. 12.6 - Prob. 2MQCh. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQCh. 12 - Prob. 12.1PCh. 12 - Prob. 12.2PCh. 12 - Prob. 12.3PCh. 12 - Prob. 12.4PCh. 12 - Prob. 12.5PCh. 12 - Prob. 12.6PCh. 12 - Prob. 12.7PCh. 12 - Prob. 12.8PCh. 12 - Prob. 12.9PCh. 12 - Prob. 12.10P
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