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a) Identify the most important source(s) of market power in the following markets and briefly explain...

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Economics

a) Identify the most important source(s) of market power in thefollowing markets and briefly explain your answers:

i. Small town bars with liquor licenses

ii. Apple iPad

iii. Electronic commerce (Amazon)

iv. Brand-name prescription drugs

v. Netflix

b) Calculate the Lerner Index for the following profitmaximizing firms:

i. Netflix: price = 10, marginal cost = 4

ii. Shell gasoline: elasticity = 0.6

c) Provide an example cross price elasticity for the followingproducts and briefly justify your answer:

i. The price of Apple iPhone X and the quantity of SamsungGalaxy S10

ii. The price of BP gasoline and the quantity of Ford ExpeditionSUV’s

iii. The price of Starbuck’s latte’s and the quantity of Nikeshoes

Answer & Explanation Solved by verified expert
3.7 Ratings (681 Votes)
Answer to the first question is provided below a i Small town bars with liquor licenses There is monopolistic competition in this market Few shops get the license and hence there are few sellers with many    See Answer
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