Us the following to answers questions (26) and (27): Suppose Lucy, Ricky, Fred, Ethel, and Little Ricky ard each thinking of buying a Porsche from Paul's Porsche Panorama, a local dealership. Suppose the choice available to each of these five consumers is to buy one car or not buy a car. Lucy's reservation price is $100,000. Ricky's reservation price is $90,000. Fred's reservation price is $80,000. Ethel's reservation pric is $70,000, and Little Ricky's reservation price is $60,000. Suppose each Porsche cost the dealership $50,000 (That is, the average cost equals the marginal cost equals $50,000.). [26] If the dealership wishes to sell five cars, without price discrimination what would its profit equal A. $250,000 B. $200,000 C. $150,000 D. $50,000 [27] If instead, the dealership can sell the five cars using first degree price discrimination, what would its profit equal? A. $250,000 B. $200,000 C. $150,000 D. $50,000 [28] According to the Schumpeter hypothesis, monopoly is: A. bad because prices tend to be lower. B. bad because prices tend to be higher. good because it induces innovation. D. good because of economies of scale leading to lower unit costs. [29] In the ultimatum game, two players are to divvy up a sum of money. Using backwards induction the proposer (i.e., the player who moves first) receives a larger share of the money compared to the responde (i.c., the player who moves second). A. True B. False [30] In a survey of 129 grocery store managers in Norway, 61% noted that they believed competitors would follow a price decrease of 3%; whereas only 7.5% noted that they believed competitors would follow a price increase of 3%. Which model of oligopoly is this most consistent with? A. Cartel B. Kinked Demand Curve C. Price Fixing Monopolistic Competition [31] A natural monopoly results from A. price discrimination B. the kinked demand curve C. economies of scale D. none of the above