Short Questions Short questions have short answers. Math is not required for this part. 10 points each. 1. Explain how an incumbent firm, by offering a cheap introductory offer to its services, drives potential entrants out of the market. 2. Why do monopolies often have many differentiated brands for similar products? 3. Why is it more profitable for fast food chains to offer a combination of items (\"value meal\" etc.) and a la carte pricing, as opposed to one or the other? 4. Explain how coach seats being terrible on airplanes is a form of price discrimination (hint: customers who prefer first class seats). 5. Explain first, second-, and third-degree price discrimination. Which one always improves efciency [though not necessarily equality)? Why do the other ones not always improve efciency? 6. In game theory, two of the solution concepts we discussed were Nash Equilibrium and Dominant Strateg' Equilibrium. We also discussed ways to evaluate solution concepts: existence, uniqueness, and invariance. Compare NE and DSE using these concepts, knowing that we encounter many kinds of games