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In atleast 2 paragraphs with 7 sentences each. What is meant by "gentlemen's agreement and what market model does it apply to? Is advertising important in this market model identified? why or why not? Why would there be a possibility of not wanting any overt or covert collusion.

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Collen Von
Collen VonLv2
28 Jan 2019

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Related questions

1. In the kinked demand curve model:

 

A. Competitors follow any price change by a rival firm.
 

B. Competitors ignore any price change by a rival firm.
 

C. Competitors match any price increase and ignore any price decrease by a rival firm.
 

D. Competitors ignore any price increase and match any price decrease by a rival firm.

 

2. Force is competing with three other firms for a military contract to remove land mines. Which of the following would not be a part of their competition strategy?

 

 

A. one-off decision
 

B. zero-sum game
 

C. discrete strategy
 

D. dynamic game

 

3. The discoverers of imperfect markets focused on what economic process to criticize the competitive model?

 

A. comparative advantage
 

B.opportunity cost
 

C. maximizing profit
 

D. economies of scale

4. Firms that operate in an oligopoly market structure would have an incentive to:

 

a.increase sales volume with price reductions.
 

b.increase profit margins with price increases.
 

c.engage in explicit or implicit collusion.
 

d.expand market share with price ceilings.

Short answer: Answer each of the questions in Section B. Answers should typically be no more than 2-3 sentences in length.

1. In the Mundell-Fleming model, what are the two endogenous variables that appear in the goods-market equilibrium condition (after substituting in all relevant functions, e.g., C = C(Y ? T), etc.)? How does this compare to the case in the (closed economy) IS-LM model? Be sure to explain the reason for any differences

2. Briefly describe how “debt deflation” works; that is, how this mechanism might cause an unexpected fall in the price level to produce a large fall in output (e.g., in the Great Depression).

3. Consider the IS-LM model, and suppose G increases by ?G units. In general equilibrium, does output increase by more, less, or the same amount as µG × ?G (where µG is the government spending multiplier)? Be sure to explain why this is the answer.

1. Why have economic analyses of clinical and administrative innovations become more important?

2. A clinic finds that by eliminating appointments it can reduce costs. The clinic is able to eliminate some telephone staff, and physicians become more productive. Patients wait until the physician is available, so there is virtually no down time. Does this analysis adopt a societal view of costs? Why might this analysis result in a bad managerial decision?

3. Treating a patient with congestive heart failure with tPlex rather than Isother increases average life expectancy to 12.3 years from 11.5 years. The added cost of therapy is $14,000. What is the cost per life year?

4. What does it mean to have market power? Are firms with market power extremely profitable?

5. Why might banning advertising drive up prices?

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