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would burger king hamburgers or lady gaga mp3s have a deadweight loss smaller relative to the total surplus in its market?

Respuesta :

Martebi

Competition do exist between firms. For Burger King hamburgers, I will expect deadweight loss to be smaller relative to the total surplus in its market.  This is because the less differentiated products are known to be more difficult to sustain its inefficient prices and the much smaller deadweight loss it has.

  • Burgers are known to be  less differentiated product and it  need to advertise so as to convince consumers that they should have one burger over another.

Consumers are said to be more indifferent about fast-food. The entry of new firms affects profits by forcing business rivals to compete.

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