Supply, Demand, and Competition OPEC is a great example of an oligopoly where there are only a few producers of a good, which in this case is Oil. The 1973 crisis definitely highlighted the power that one organized group can have. In this case, how would having more competition between sellers have changed the way this event played out? This would be an example of monopolistic competition.

(reading is oil crisis of 1973)

David consumes two things: gasoline (g) and bread (b). david's utility function is u(g, b) = 10g^0.25 b^0.75. use the lagrange technique to solve for david's optimal choices of gasoline and bread as a function of the price of gasoline, p_g, the price of bread, p_b, and his income m. with recent decrease in the price of gasoline (maybe due to external shock such as shale gas production) does david increase his consumption of gasoline? for david, how does partial differential g/partial differential p_g depend on his income m? that is, how does david's change in gasoline consumption due to an increase in the price of gasoline depend on his income level? to answer these questions, find the cross-partial derivative, |partial differential^2 g/partial differential m partial differential p_g.