Washtenaw Dairy in Ann Arbor, Michigan, sells 63 flavors of Strohs Mooney’s ice cream, and Ben and Jerry’s Web site also lists 63 different flavors of ice cream. These numbers are similar to the varieties of smartphones sold by Samsung, Nokia, and Motorola. Toyota makes only 16 varieties of vehicles and Boeing makes 16 varieties of airplanes. Why is there more variety in smartphones and ice cream than in automobiles and airplanes?

Use the following information to work Problems 1 to 3. Elixir Spring produces a unique and highly prized mineral water. The firm’s total fixed cost is $5,000 a day, and its marginal cost is zero. Table 1 shows the demand schedule for Elixir Spring water.

On a graph, show the demand curve for Elixir water and Elixir Spring’s marginal revenue curve. What are Elixir’s profit-maximizing price, output, and economic profit?

An increase in the wage rate will A. shift the labor supply curve to the right. B. shift the labor supply curve to the left. C. cause an upward movement along the labor supply curve. D. cause a downward movement along the labor supply curve. E. have no effect on the quantity of labor supplied.

Think about the markets for cable television service, wheat, athletic shoes, soda, toothbrushes, and ready­mix concrete. Which of these markets are examples of monopolistic competition? Explain your selections.

Use the following information to work Problems 8 to 10. Quebec losing hold over maple syrup industry to U.s. competition The Federation of Quebec Maple Syrup Producers tries to limit production and stockpiles a “strategic reserve” to keep the price of syrup high. But Quebec producers are feeling increased competition from Vermont, New York, and Maine, where market share has increased and is expected to increase further in 2017 and 2018.

Starting with the industry making a positive economic profit, explain how the maple syrup market and the profit of an individual producer will change in the long run.

Monopolistic competition differs from ________.

A. monopoly because firms cannot set their own price

B. oligopoly because firms produce differentiated goods or services

C. perfect competition because the goods or services produced are differentiated

D. monopoly because the good produced by each firm has no close substitute

Bobbie’s Hair Care is a natural monopoly. Table 1 shows the demand schedule (the first two columns) and Bobbie’s marginal cost schedule (the middle and third columns). Bobbie has done a survey and discovered that she has four types of customers each hour: one woman who is willing to pay $18, one senior who is willing to pay$16, one student who is willing to pay $14, and one boy who is willing to pay$12. Suppose that Bobbie’s fixed costs are $20 an hour and Bobbie’s price discriminates.

Who benefits from Bobbie’s price discrimination? Is the quantity of haircuts efficient?

California plans to crack down on the use of fumigants by growers of strawberries. The biggest burden will fall on Ventura County’s growers, who produce about 90 percent of the nation’s crop.

On the graph, show the long-run effects of the pollution crackdown

At the market equilibrium price, no children under 10 years old attend the circus. Big Top offers children under 10 a discount of 50 percent. How will this discount change the consumer surplus and producer surplus? Will Big Top be more efficient by offering the discount to children?

Use the following information to work Problems 1 to 3. Elixir Spring produces a unique and highly prized mineral water. The firm’s total fixed cost is $5,000 a day, and its marginal cost is zero. Table 1 shows the demand schedule for Elixir Spring water.

Compare Elixir’s profit-maximizing price with the marginal cost of producing the profit-maximizing output. At the profit-maximizing price, is the demand for Elixir Spring water inelastic or elastic?

U.S. forestland has been a constant 755 million acres for the past century, but the number of trees has increased by 20 percent since 1970, the volume of wood has doubled since 1953, and the United States is the world’s largest supplier of forest products. Decisions by millions of private forest­land owners are responsible for this remarkable performance. Source: Frank Beidler letter, Chicago Tribune, October 23, 2015 Is the U.S. timber industry efficient and do forest­land owners operate in the social interest or self­interest? What effect does private ownership have on the efficiency of the timber industry?

Use the following information to work Problems 8 to 10. Quebec losing hold over maple syrup industry to U.s. competition The Federation of Quebec Maple Syrup Producers tries to limit production and stockpiles a “strategic reserve” to keep the price of syrup high. But Quebec producers are feeling increased competition from Vermont, New York, and Maine, where market share has increased and is expected to increase further in 2017 and 2018.

Draw a graph to describe the maple syrup market and the cost and revenue of one maple syrup producer in 2016, assuming that all producers are making a positive economic profit because of the actions of the Federation of Quebec Maple Syrup Producers.

Read Eye on Record Stores and explain how Internet retailing of recorded music changed the constraints faced by small traditional record stores. Why did many record stores exit rather than shut down temporarily?

Create Lin’s short-run supply schedule and make a graph of Lin’s short-run supply curve. Explain why only part of Lin’s short-run supply curve is the same as its marginal cost curve.