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1. The intent of antimonopoly policy is to advance __competition among firms_____ . which leads to take down __price for customers______ . Explain why this is so? The intent of antimonopoly policy is to advance competition. which leads to take down monetary values. If a company had the power of monetary value control that comes with being a monopoly. they would gain by picking the quantity/price that equals the highest gross for their company.

This would be probably a lower measure and higher monetary value than would predominate if there was competition. Uniting operations could take to greater efficiency. Cost nest eggs could come by uniting HR or accounting depts. The chief job with cost nest eggs is that a monopoly does non hold the force per unit area to run expeditiously.2. Assume a healthy baseball hurler is deserving $ 5 million per twelvemonth to his squad. compared to merely $ 1 million for an unhealthy 1. Harmonizing to a baseball executive.

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“If my premises are right. our squad is willing to pay a upper limit of $ 3 million for a hurler in the free-agent market. ” What are the executive’s premises? Are these premises realistic? The executive is presuming that there is asymmetric information out at that place about certain hurlers. significance that the squad that is “selling” the participants has more information on his wellness than the uninformed purchaser. the executive.

So a sensible premise is that the executive will divide the difference in the assorted market and pay the norm. which is $ 3 million. The executive does hold realistic premises. merely for the fact that he has asymmetric information.

and is non to the full notified of the players’ hurt position.3. Imperfect information can travel both ways. What are some illustrations ( your ain. non from the text ) of market state of affairss in which the marketer has more information than the purchaser and some illustrations in which the purchaser has more information than the marketer?One illustration where the marketer knows more than the purchaser would be when you are buying a house. the purchaser does non cognize if there are any jobs with the foundation or roofing or if all the contraptions work good or will go on to work good. The marketer does cognize. because they have lived there long plenty to cognize what is in good form and what is in bad form on the house.

An illustration of the purchaser cognizing more than the marketer is in the old-timer market. because the purchaser may cognize more history about what they are purchasing than the marketer. The marketer may non hold put as much clip into researching the merchandises.4. Critical Thinking: All provinces. of which I am cognizant.

require car proprietors to see their vehicle. Yet. surveies show that holding insurance really increases the likeliness of an accident and increases the likeliness of a auto / bike accident. Discuss why this is so. Who is protected and who is harmed by required car insurance? The ground that holding insurance increases the likeliness of an accident is due to the moral jeopardy associated with auto insurance.

This is a state of affairs in which one side of an economic relationship takes unwanted or dearly-won actions that the other side can non detect. For case. Mary’s auto insurance company doesn’t know that she on occasion texts while driving because they can’t physically see her drive.Mary does this because she assumes that if anything happens. she is insured and she will be able to financially cover the costs of any accident.

It takes the duty off of Mary ( somewhat ) and puts it on the insurance company which makes Mary act more recklessly. The individual driving the vehicle is slightly more protected because of insurance. They are able to financially cover losingss to other drivers due to their carelessness and hazard pickings.

However. the other drivers on the route and the walkers that may be out walking are harmed by this added moral jeopardy because. let’s face it. all the insurance in the universe won’t conveying person back if Mary is texting and driving and kills them.

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