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Why do low-budget films charge the same amount at the box office as super-high budget films?

Opportunity Cost of the Seats Once the movie is made the cost of production is sunk and irrelevant to the proper pricing of tickets. Only the marginal costs of serving an additional customer and the ...
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Can destruction be profitable?

It can be profitable for the monopolist to do so. For the conventional producer who is a price taker the profit objective function looks like this: $$\max_{q} \Pi^c$$ where $\Pi^c = P \cdot q - C(q)$....
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Nash equilibrium of a Bertrand game with different marginal costs

Yes, there is no equilibrium in pure strategies. For any price charged by firm 2 above $c_1$, firm one could only best respond by charging the largest price that is strictly smaller. which is ...

Books friendly to self-studying Industrial Organization

While taking Industrial Organization I remember working with: Strategies and games: theory and practice by Dutta Introduction to industrial organization by Cabral Industrial organization: theory and ...
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Monopolistic and Bertrand (Nash) Competition

The following paper compares the efficiency of the Bertrand and Cournot game in the case of product differentiation. However, their utility function is more general than the Dixit/Stiglitz case. You ...
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Firm Sizes over the business cycle

These guys (paper) claim the distribution is still power-law, but steeper in recessions and flatter in booms. [Content added after suggestion] While it is well known that the distribution of firm ...
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