Study Guide Survey of Economics Economics 211 Chs. 8­10

1. price searchers, price takers, price discrimination

2. revenue, marginal revenue

3. profit maximization
4. competition & purpose of competition

5. antitrust policy

6. horizontal, vertical and conglomerate mergers

7. oligopoly

8. predatory pricing and resale price fixing (pp. 237-­38)

9. Sherman and Clayton Acts
   

1. Do restrictions on competition reduce competition or merely change its form?

2. Why is the term "monopoly" ambiguous?

3. How do restrictions on free competition and special privileges lead to price searchers?

4. What is the advantage of price taker markets that economists see? i.e. Why are price taker markets preferred by some economists? Explain. (see pp. 184-­87)

5. Explain the rules of profit (or net revenue) maximization.
6. Why is marginal revenue less than price?

7. What are the conditions for a price searcher to practice price discrimination? Why do these have to hold? Give some examples of price discrimination? How does a price discriminator set prices in the various segments of the market to maximize net revenue? Why was the case of differential pricing for nursing students NOT a case of price discrimination?

8. Why is it difficult for sellers to agree to not compete?

9. What makes "selling below cost" or predatory pricing somewhat unlikely or at least a risky ploy?

10. What are the arguments in both support and in opposition to our antitrust laws?

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