Consider the market for Red Rambo (a new de-energizer) in which demand Q is rela
ID: 377101 • Letter: C
Question
Consider the market for Red Rambo (a new de-energizer) in which demand Q is related to price P by
P(Q) = Q ^ (-3) .
In this market there are 5 producers, say from 1 up to 5. Each firm i can produce any non-negative quantity of Red Rambo, say qi. larger than or equal to 1/10 at costs qi2.
So, there are no fixed costs and production starts at least at 1/10 . That is below 1/10 production costs are infinitely high. These firms produce identical products with no transaction costs. We assume that these firms are in a competitive market. Determine the market price and total quantity Q when these firms form a cartel at which they agreed to produce equal amounts
Explanation / Answer
A) Yes, they do keep track of purchases. Almost all prepaid gift cards require some form of registration where they collect different data about you: name, address, zip code, phone number, etc.
B) It will. The gift card becomes an account, and you can review your purchase history just like a regular credit card.
However, you can be a liar when you activate the card, and put in fake information. You can go to a store reasonably far away, or to a very busy store (my local pharmacy is always stuffed). You can also pay with cash, which means you don't have records from a credit card company to link your identity with. And, if you're smart with your purchases (don't attempt to order drugs to your house) they can't get any information from the merchant.
tl;dr: If you have cash, you avoid most of the tracking. If you lie to the company, it's very easy to dodge identification.