c) If the market demand decreased to Q’’D=4,150-50P,
what is the equilibrium price?
d) For (a)-(c), if TC=0.005Q2-Q, what is the profit in each
case?
Froeb et al.’s Chapter 9:
a) Individual problems: 9-3 and 9-4.
Individual Problem 9-2
Because beer and marijuana are seen as substitutes, beer
sellers would have opposed the legalization of marijuana.
But since snack foods are a complement to marijuana,
snack food sellers would have been in favor of legalization
of marijuana.
‘Individual problem 9-3: Snack food vendors and beer
distributors earn some monopoly profits in their local
markets but see them slowly erode from various new
substitutes. When CA voted on legalizing marijuana,
which side do you think that California beer distributors
were on? What about the snack food vendors? Why?
Individual problem 9-4: Relative to managers in more
monopolistic industries, are managers in more competitive
industries more likely to spend their time on reducing
costs or pricing strategies?
Froeb et al.’s Chapter 11:
a) Individual problems: 11-4 and 11-5.