Managerial Economics

1. Google is the largest technology company engaged in the online advertising services. Google, originally started as a search engine company, since then has expanded itself in many other businesses such as Google Maps and Gmail, even to robotic tools. What is the category of market structurethat google company belongs to based on the Market Structure Theory? Describe in detail and explain the rational reasons! 2. We are familiar with several oligopoly market models, namely Sweezy, Cournot, Stackelberg and Bertrand. a) Sweezy's oligopoly behavior; believe that their competitors will follow the price decline, but will ignore prices that are leading to a very stable prices, even with the change of costs in the industry b) Cournot's oligopoly behavior; companies choose quality based on the level of output produced by its competitors c) Bertrand's oligopoly behavior; set prices based on their competitors' prices. In the end they use the same price as marginal cost, and get economic profit = 0 d) Stackelberg oligopoly behavior; have leaders and followers. The leader knows how the I followers will behave, and followers only maximize the profit determined by the leader, this gives profit / profit for each company, but the leader's profit is much higher than the followers. What decisions should be taken to achieve the balance in oligopoly, explain