3551 - Second Assignment Questions - Sp-08

3551 - Second Assignment Questions - Sp-08 - Econ 3551...

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Econ 3551 Online Sp-08 Second Assignment Questions 1. Henry Ford gave an interview in 1916 where he talked about his pricing strategy. There is a quote from this interview in the Commentary for this week’s assignment. While Ford would never calculate the elasticity of demand, you can calculate it from the information in the quote. What was the elasticity of demand for Ford’s Model T based on this information? ______________________. 2. Why was OPEC so successful while OBEC failed to even get started? _________________________________________________________________ _ 3. The Commentary emphasized the point that firms practicing price discrimination rarely end up in court. However, we noted that dry cleaners often find themselves in court when they price discriminate with blouses vs. shirts cleaning prices. Why are dry cleaners in court? _________________________________________________________________ _ 4. If a firm increases its price and its demand is inelastic, its total revenue will ____. 5. If a firm decreases its price and its demand is inelastic, its total revenue will ____. 6. If a firm increases its price and its demand is elastic, its total revenue will ____. 7. If a firm decreases its price and its demand is elastic, its total revenue will ____. 8. Cartels (both formal and informal) will only be successful if the they the demand for their product is _____________________. 9. Why is the elasticity of demand so much higher for the services of dentists than for the services for doctors? _________________________________________________________________ 10. Intel offered computer makers a very generous co-op advertisement plan in which Intel would pay most of the cost of advertising computers, provided the computer maker featured “Intel Inside” in its ads. Computer makers liked the funding, but worried that the ads would turn their computers into ________________
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This homework help was uploaded on 04/17/2008 for the course ECON 3551 taught by Professor St.clair during the Spring '08 term at CSU East Bay.

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3551 - Second Assignment Questions - Sp-08 - Econ 3551...

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