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Unformatted text preview: Jimmy to stop selling peeps; Jimmy finds out, though, that if he gives her $0.20 per peep shell stop complaining. What effect does this bribe have on Jimmys marginal cost per peep? What is the new profit-maximizing quantity of peeps? What impact does this bribe have on Jimmys total profit? (4 marks) 2. In the long run, there is no difference between monopolistic competition and perfect competition. True, false, or uncertain? Discuss this statement with respect to the following: (8 marks 2 marks each) a. The price charged to consumers b. The average total cost of production c. The efficiency of the market outcome d. The typical firms profit in the long run Notes: Show all of your calculations and explain your steps. You can think about the assignment in a group, but you have to convince me that you wrote the answer alone; copied assignments will receive zero....
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- Spring '10