Learning Goal: I’m working on a micro economics question and need an explanation and answer to help me learn.
Q1.What is systems engineering and how has Elon Musk applied systems engineering to cut costs and increase profits? Are Musk’s innovations subject to competition, copycats, and creative destruction? Over the long run, how can Musk continue to generate economic profits?(5 Marks) [Ch. 6]
Q2. U.S. pharmaceutical companies charge different prices for prescription drugs to buyers in different nations, depending on elasticity of demand and government-imposed price ceilings. Explain why these companies, for profit reasons, oppose laws allowing re-importation of drugs to the United States. (2 Marks) [Ch. 7]
Q3. It has been proposed that natural monopolists should be allowed to determine their profit-maximizing outputs and prices, and then government should tax their profits away and distribute them to consumers in proportion to their purchases from the monopoly. Is this proposal as socially desirable as requiring monopolists to equate price with marginal cost or average total cost? Explain. (3 Marks) [Ch. 7]
Q4. Why is there so much advertising in monopolistic competition and oligopoly? How does such advertising help consumers and promote efficiency? How does advertising promote inefficiency? (2 Marks) [Ch. 8]
Q5. Why do oligopolies exist? List five or six oligopolists whose products you own or regularly purchase. What distinguishes oligopoly from monopolistic competition? (3 Marks)[Ch. 8]