Short-answer Questions and Problems: Be
thorough, clear, and show your work.
1.) In a perfectly competitive market, price is
equal to marginal cost in the long run. Explain why this is not
true for a monopolist or for firms in a monopolistically
competitive market.
2.) Suppose Pizza Hut raises its price by 8%,
and as a result, the demand for Little Caesar’s pizza goes up by
4%.
a.) What is the cross-price elasticity of
demand for Pizza Hut and Little...