Consider the market for wheat which is a perfectly competitive market. Is the market demand curve the same as the demand curve facing an individual producer? If not, explain how and why they are different? Illustrate your answer graphically
What will be an ideal response?
The market demand is downward sloping while the demand for an individual firm's output is horizontal at the equilibrium market price. This is because an individual producer is too small to influence the market price and must take the market price as given. At the market price, the individual seller can sell all the output she desires. The figure below shows the market demand curve and the demand curve for a single firm.
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Price discrimination is more likely in the case of services than in the case of goods because
A) producers of goods usually do not face downward sloping demand curves. B) it is easier to distinguish customers with different elasticities of demand with respect to services than with goods. C) elasticities of demand vary more with services than with goods. D) it is more difficult to resell services.
In the prisoner's dilemma game:
A. neither player has a dominant strategy. B. both players have a dominant strategy. C. only one player will ever have a dominant strategy. D. All of these may be true in a prisoner's dilemma game.