models. The manufacturer has determined that men value
a simple microwave at $70 and one with auto defrost at
$80 while women value a simple microwave at $80 and one
with auto defrost at $150. If there is an equal number of
men and women, what pricing strategy will yield the
greatest revenue? What if women compromise the bulk of
microwave shoppers?
Salvatore’s Chapter 13:
a) Discussion Questions: 8 and 10.
b) Problems: 12, 13, and 15.
Discussion 8: What is the basic difference between using a
subsidy to induce producers to install antipollution
equipment and a tax on producers who pollute?
Discussion 10: Given the difficulties that the regulation of
public utilities faces, would it not be better to nationalize
public utilities, as some European countries have done?
Explain your answer
Problem 12: Determine whether the Justice Department
would challenge a merger between two firms in an
industry with 10 equal sized firms, based on its 1984
Herfindahl-index guidelines only
Problem 13: Explain:
a) In what way the U.S. trucking industry exemplified the
capture theory hypothesis of government regulation prior
to the passage of the Motor Carrier Act of 1980 and