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July 7, 2021

Discussion 4

Microeconomics

What entry barriers exist in (a) the fast-food industry, (b) cable television, (c) the auto industry, (d) illegal drug trade, (e) potato chips, and (f) beauty parlors? (6 points)
Why do 4,000 new pizzerias open every year? Why do just as many close? (2 points)
If one gas station reduces its prices, must other gas stations match the price reduction? Why or why not? Explain (2 points)
How would our consumption of cereal change if cereal manufacturers stopped advertising? Would we be better or worse off? (2 points)
What makes cable companies natural monopolies? How did cable profits affect the emergence of satellite transmissions? (2 points)
Why would auto manufacturers resist higher fuel efficiency standards? How would their costs, sales, and profits be affected? (2 points)
Why are the price and income elasticities for food so low? Explain (2 points)

no more than 500 words please. I you need reading material, please let me know. please try not to use too many sources. These questions come from the understanding of chapter 11-15 in The Economy today ISBN:1259289311

ISBN: 1259289311

ISBN: 1259289311

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