Homework problem set. Mathematics & Economics. Math Problem.

Homework Problem Set
Name Course Instructor Date
Essay QuestionsFor some questions in this part, there may be no definite correct answers for this part. Make your own logical arguments to support your answers.
the decisions of users in one group a
1. As covered in Chapter 8, an essential facility is an input controlled by a monopolist that is essential to competitors and is effectively infeasible for competitors to duplicate. The essential facilities doctrine is that the monopolist must share those resources with their competitors on reasonable terms.a. Do you think Google’s search engine is an essential facility? (Address this question inthe context of online retailing, where the competitors are vertical search engines.)
Google is the dominant search engine that fails to offer fair, reasonable and nondiscriminatory terms for the users and the competitors. As such, it is an essential facility even as there are smaller competitors in online searches. There are different search engines than Google, but Google influences what information and content that the users’ access and the company tries to foreclose competition to remain the dominant player. The vertical search engines are niche or single-purpose engines, and in online retail, they still need to be visible form Google to be useful to the users.
b. If Google is an essential facility, how would you apply the essential facilities doctrine?
Google is popular and not indispensable, but the platform controls consumers' access to online information and using the antitrust laws, Google should be allowed to deal with competitors as it is an essential facility. Furthermore, it is difficult to duplicate Google’s operations Google as an essential facility that monopolizes internet search, digital content and access to online information.
2. In the context of the duopoly model of competition with network effects we covered in class, consider firms’ prices prior to any firm becoming dominant. Address how a firm’s dynamically optimal price would respond to each of the following situations.
a. Consumer demand is expected to grow faster.
Dynamic price optimization (dynamic pricing) allows the networks to set prices based on preferences and needs. Networks to set prices are based on preference and needs and they can increase prices since prices increase with growing consumer demand.
b. A firm’s discount factor is reduced (so that it values future profits less)
As prices decrease there is growth in demand for the network services, and the consumers prefer this over the rival if they offer similar quality of services. However, a firm’s installed base influences its competitiveness in a duopoly
c. A superior product is discovered, which is currently in the development stage. Once ithits the market in a few years, the current products will be obsolete. When a superior product is discovered the duopoly can utilize typing to influence the buyers to use products...