ECO 100 Week 3 DQs
1. "Production Costs and Perfect Competition" Please respond to the following:
You are the owner of a fast-food restaurant. Given a new item that you recently advertised, you experience additional demand for your business that you do not want to ignore. Identify your fixed and variable costs at your fast-food restaurant, and explain the changes to each of these costs, given the increased demand.
Examine a perfectly competitive firm that you have recently purchased a product from, focusing specifically on how it relates to the characteristics of the market
2. "Monopoly and Market Entry and Monopolistic Competition" Please respond to the following:
Identify a company in your local area that you would classify as a monopoly. Explain why you classified the company as a monopoly, and state how the company relates to at least two characteristics of that particular market.
From the e-Activity article, explain your position on whether or not Apple is stifling competition and monopolizing the tablet market. Examine the type of market structure within which Apple operates. Support your answer by relating to each of the characteristics described in Chapter 8 of your textbook.
3. "Public Goods and Moral Hazard" Please respond to the following:
Identify a product that you have consumed in the past couple of months and explain what makes the product a public good, based on the characteristics of a public good as defined in this week’s textbook readings.
In 2020, a leading insurance company started a policy that pays policyholders a 5 percent rebate on their insurance premium in a year in which the policyholders do not file an insurance claim. For example, a household with an annual premium of $1,200 will get a $60 rebate check each year it does not file a claim. Identify what problem(s) the insurance company is trying to solve by introducing this policy.