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Provide an example of a competitive situation where there is a second-mover
advantage.
A perfectly competitive market is described by the demand curve QD= 60 '“ 2P, and the
supply curve QS = 5P '“ 10. A typical firm has the total cost equation: C = 16 + 2QF +
QF
2. What is the equilibrium price and quantity in the market? Compute the firm's total
revenue, total cost, and total profit.
What circumstances cause the sealed-bid auction to generate greater revenue than the
normal sealed-bid auction?
Suppose that two independent geologists begin with different prior assessments
concerning the chance of oil and natural gas at a particular site. They both observe the
results of a seismic test. Will they agree concerning their revised probabilities? In what
instance, would their revised probabilities be identical?
Determine the value-maximizing order quantity when the buyer's total value from
purchasing Q units of output is B = 30Q '“ Q2'š and the seller's cost of producing Q
units is C = .5Q2.
Is an efficient market allocation fair? Explain why or why not.
What is meant by self-selection in the insurance market?
