Professor Binmore has a monopoly in the market for undergraduate game theory textbooks. The time-discounted value of Professor Binmore’s future earnings is $2,000. Professor Ditt is considering writing a book to compete with Professor Binmore’s book. With two books amicably splitting the market, the time-discounted value of each professor’s future earnings would be $200. If there is full information (each professor knows the profits of the other), under what conditions could Professor Binmore deter the entry of Professor Ditt into his market?

Susie buys two goods - rounds of golf and massages. suppose that the price of a round of golf is $20, and the price of a massage is $30. in a typical week susie will play two rounds of golf, getting 20 units of satisfaction from the second round. she normally buys three massages each week, with the third giving her 30 units of satisfaction. if she were to buy a fourth massage in a week, it would give her 20 units of satisfaction. if the price of massages is reduced to $15, which of the following outcomes might we expect to occur? a) susie would leave her consumption choices unchanged because of diminishing marginal utility in the consumption of massages. b) susie would buy more massages and more rounds of golf, as predicted by the substituion effect. c) susie would buy more massages and fewer rounds of golf, as predicted by the substitution effect. d) susie would buy more massage and fewer rounds of golf, as predicted by income effect.