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Are credit card surcharges better for the consumer?

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Are credit card surcharges better for the consumer?
Answer: 

I appreciate your sharing your view on a specific policy issue based on the systematic application of economic concepts.

My understanding of the suggestion is that the mandatory surcharging rule on credit card payments would be better for consumers for the following reasons.

First, paying with credit cards incurs costs eventually passed on to consumers.

Second, no surcharge rule (uniform pricing across payment methods) burdens even cash-payers with a part of such costs.

Is starting on an auto-mechanic shop advisable?

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Is starting on an auto-mechanic shop advisable?
Answer: 

Running a business is always risky, and owning an auto mechanic shop is no different. Your concern about changing technology is interesting because I see two main avenues of change. First, there may be changes in the process of repairing vehicles, new tools, automation, and new techniques. The second avenue of technological change is the changing propulsion technology and vehicle software.

Technology that makes repairing vehicles easier would likely increase the number of competitors in your area. However, that same technology would likely reduce your daily expenses.

Is an industry oligopolistic or monopolistic?

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Is an industry oligopolistic or monopolistic?
Answer: 

As you wrote, to compute concentration ratios, you would need data on quantities produced or sold (property appraisals in your case) and a reasonable market definition, which can be a separate challenge on its own. 

Does marketing raise costs/profits?

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Does marketing raise costs/profits?
Answer: 

You asked how a monopolist might use marketing campaigns to increase profit.  As you discussed, marketing efforts would likely result in consumers willing to pay more, shifting the demand out.  This can only be good news for the firm if ignoring the marketing costs.  Let’s remind ourselves that the monopolist is essentially choosing a point on the demand curve that maximizes profit.  Since the demand has shifted out, the firm can both produce and charge more than before, which would strictly improve revenue.  Exactly how much more to produce (which determines how mu

Why might Accounting Profit be at least as high as Economic Profit?

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Why might Accounting Profit be at least as high as Economic Profit?
Answer: 

Great question. First off, when we’re talking about a firm, be careful with what you label economic (or opportunity) costs: they are the sum of implicit and explicit costs. Accounting and economic cost both consider explicit costs (things like wages, materials, and rent). Implicit costs are only included in economic costs — this extra category is why we expect economic cost to exceed accounting costs. So, could implicit costs hypothetically be zero, making accounting and opportunity costs equal? 

Does Wal-Mart have pricing power?

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Does Wal-Mart have pricing power?
Answer: 

A seller has market power if it is able to PROFITABLY price higher than the competitive price because it has a downward sloping demand curve and sets its output where marginal revenue equals marginal cost but sets its price above its marginal cost. In a purely competitive market, firms cannot do this because a firm in such a market is a price taker: it faces a horizontal (flat) demand curve where price must equal marginal cost. Ugh, econ speak.  

What does dominant market position mean? Is it acceptable?

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What does dominant market position mean? Is it acceptable?
Answer: 

My short answer from ten years ago: When consumers are made better off in the short and long run.

My short answer today: That’s a toughie.

The economics of the automotive repair trade

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The economics of the automotive repair trade
Answer: 

Auto repair is an example of a "credence good," which is a type of product or service where an expert knows more about the quality the consumers need than the consumers themselves. These kinds of markets can work poorly if consumers are unable to verify if the quality of the service they received was the "right" quality, or that the expert actually provided the promised service. In the case of auto repair, consumers typically worry that they will be recommended unnecessary repairs, or that the repair technician did not actually perform the repairs they said they did.

How to derive market information from listing prices only

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How to derive market information from listing prices only
Answer: 

The question you are asking is about the bid-ask spread.  The bid is what a buyer wants to pay for an item. The ask is what the seller wishes to receive.  You know the ask, you want to know the bid.  The bid would be demand, the ask would be supply (see, Ask an Economist any question and eventually you'll get "Supply & Demand" as an answer).  For example, a December gold futures contract today had a spread of about 20 cents per ounce.

Foreign Built American Cars vs American Built Foreign Cars

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Foreign Built American Cars vs American Built Foreign Cars
Answer: 

This question addresses an important debate in the current economic climate in which global production network and offshoring are prevalent. Economic research on this topic from both theoretical and empirical aspects is vast and is still ongoing. We can approach the question from three different directions.

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