SIDES GAME

Profit Max. Q 40

Unregulated Price $3

Social Optimal Price $2.33ish

Fair Return Price $2

Unregulated Profit $40

Fair Return Profit $0

What is White’s Dominant Strategy? high

Unit Elastic Q 50

Outline DWL Drawn as a triangle, but it is not actually a triangle Outline DWL Drawn as a triangle, but it is not actually a triangle. Just saying…

Monopolistic Competition LRATC curve will be ___tangent_____ to D/AR curve

Fair Return Price will allow the Monopolist to earn No accounting profit No economic profit A normal profit No economic loss A little economic profit

What will happen to the unregulated monopolist’s quantity of output if Total Fixed Cost increases? nothing

Which type of efficiency do monopolistically competitive firms produce? Allocative Productive neither

What is the gap between the profit max What is the gap between the profit max. Q and the Productively efficient Q for a monopolistically competitive firm called? Excess capacity

Which market structures earn zero long run economic profit? Perfect competition Monopolistic competition

Collusion that occurs without actual communication between firms is called tacit

Which market structure has highly interdependent firms? oligopoly

This occurs in a payoff matrix when neither player acting unilaterally can improve his payoff. Nash Equilibrium

What is the Nash Equilibrium? High high

A player who is best off playing a single strategy regardless of his competitor's strategy has this. Dominant strategy

A monopoly should decrease production if MR<MC

Does price discrimination increase or decrease consumer surplus?

Which market structure ALWAYS features product differentiation? Monopolistic competition

Name a condition of price discrimination. Monopoly/market power Market segregation No resale

What is the Dominate Strategy Equilibrium? High high

Colluding oligopolistic firms are called a cartel

Which will change output? Lump sum tax Lump sum subsidy Per unit tax Per unit subsidy

Which degree of price discrimination eliminates the most consumer surplus? First (perfect)

Which degree of price discrimination is also called “perfect” price discrimination? 1st

Unregulated monopolies sell less at a higher price

What grade will you earn on tomorrow’s test?