1. Why might a firm not charge everyone the same price for the same product?
   We've been looking at firms using the MR = MC rule to choose their output quantity and price; a pricing strategy is a way to apply this rule in more complex situations. So far, we've been assuming that firms charge the same price to all their customers. In some real-world markets, firms use price discrimination to charge different customers different prices.
   
   Also, in some real-world markets, firms are interdependent. That is, the actions of one firm have a noticeable effect on other firms, and these other firms are likely to react. Interdependence makes it more difficult for firms to choose a profit-maximizing pricing strategy.
   
   
2. What is the difference in rivalry between firms that are interdependent and those that are not?
   When firms are interdependent, the decisions of any one firm have a significant effect on their rivals. These rivals are then likely to react to the initial decision. Trying to figure how your rivals will react makes it much harder to determine a firm's profit-maximizing decisions.
   
   For example, think about what would happen in the market for pizza if Pizza Hut cut its prices for pizzas. Pizza Hut's rivals, like Domino's, Godfather's, Papa John's, and others, would lose customers to Pizza Hut—something they would not like. They could react by matching Pizza Hut's price cuts, or in other ways like offering free soda pop or bread sticks. Pizza Hut would have to figure out how its rivals would react before it can decide whether cutting prices would increase Pizza Hut's profits or not.
   
   
3. Why and under what conditions do firms cooperate rather than compete?
   Firms often cooperate with other competitors in their market. Cooperation frequently enables firms to retain economic profits that would be lost if the firms actively competed with each other. Cooperation can take many forms, from formal cartels where sellers get together and jointly set prices and divide markets, to informal collusion or price leadership. Some actions that don't seem to be cooperative, such as cost-plus pricing and most-favored-customer (MFC) arrangements, can help reduce competition.
   
   
4. Why does the government intervene in the affairs of business?
   Although competitive markets work well for consumers, many real-world markets are not very competitive. Firms in these markets may cooperate with each other to increase their profits by raising prices. In these cases, the government may interfere with the decisions of firms by making the firms act in ways that are more competitive. Sometimes, the government may intervene in markets to provide benefits to special interest groups.