Q:
In the Colluding Refiners problem on the 2004 exam, is it possible to show MR on the graph?
A:
See the other posts on demand and marginal revenue.
Q:
Also on this problem, why is DWL $5 million rather than $10 million?
A:
I think you are right, in that the calculation should be 1/2 * ($2.50-$1.50)* 20 million. ($1.50 is the point on the supply curve at 100 million gallons.)
About Me
- Economists Do It With Models
- I am a Ph.D. student in Business Economics at Harvard University. My research is on behavioral economics, incentives and consumer behavior. I also spend my academic year working for Ec10, which is the introductory undergraduate economics course at Harvard. Outside of school, I like cooking, going to the driving range and playing with my dog Gizmo. For more information, see www.economistsdoitwithmodels.com.
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