economics 103 3

Are you pressed for time and haven’t started working on your assignment yet? Would you like to buy an assignment? Use our custom writing services for better grades. Even if your deadline is approaching fast, our writers can handle your task right when you need it. Our writers will complete your order from scratch and make sure it’s completely unique.


Order a Similar Paper Order a Different Paper

Question 1. Suppose you are working as a consultant for a firm that is a monopoly and is worried about its policies in the short run. What would you recommend in terms of quantity changes (raise, cut, shut down or stay put) and price changes (raise, cut, stay put) in each of the following situations a through c:

a.[5 points] P = $299 MC = $349 AVC = $249

b.[5 points] MR = $150 MC = $100 AVC = $140

c.[5 points] P = $288 MC = $288 AVC = $287

[Note: P = price; MR = marginal revenue; AVC = average variable cost; MC = marginal cost]

Question 2. Libertyville has two optometrists, Dr. Smith (S) and Dr. Jones (S). Each optometrist can choose to advertise his service or not. The net revenue to each optometrist, in thousands of dollars, is listed on the payoff matrix below. Answer questions a through c:

a.[5 points] Does Dr. Smith have a dominant strategy?

b.[5 points] Does Dr. Jones have a dominant strategy?

c.[5 points] Does a Nash equilibrium exist for this game?

Dr. Smith (S)

Advertise

Don’t advertise

Dr. Jones (J)

Don’t

Advertise advertise

J: $185 S: $175

J: $186 S: $215

J: $225 S: $165

J: $205 S: $195

Question 3. [10 points] Suppose Wilwaukee Telecom offers its users the option of paying either (a) $2.00 per minute for telephone service or (b) a $225 flat charge for a year of unlimited toll-free calls. Consider a customer with an annual demand for telephone service of P = 11 – 0.1Q, where P is the price per minute and Q is the number of minutes of calls made per year. Calculate the consumer surplus for each of the plans (a) and (b).

Writerbay.net

Do you need help with this or a different assignment? Even when your task is complicated and the deadline is in less than 2 days, you still have every chance to get a good grade for it. How? By completing the order form, you will get the finest custom-written assignment at an affordable price. We also deliver a number of services for free (e.g., revisions, editing, checking the text for authenticity). Use our paper writing service to receive effective help with your homework.


Order a Similar Paper Order a Different Paper