There are currently 7 firms in the market for office supplies with market shares given by 50%, 20%, 10 %, 5%, 5%, 5%, 5%. The two firms with a market share c 20% and 10% decide to merge. The department of justice will typically reject the merger
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- Suppose there are two firms, and they are able to coordinate with each other. What are the expected profits for each firm if they successfully collude and split the market output equally? The answer has to be a number louin which only to trim 1 and 2 stud producer for de her dece how rare pers to pan and bring to town The Tes cenere fr ( Price Test Revenue land Total Pro 73 ༡ བྷསྶཀྐཏྟཊྛགྒཊྛངྒཱཊྛཱརཱབྷིཛྫོ 120 0 110 100 2000 93 2700 33 5000 71 2000 53 3840 50 3500 31 2010 130 20 2000 110 90 1133 130 4 ሰWhat is a company based in Nova Scotia that you think shoud begin selling its products in a country outside of North America? who are some current competitors in that country and their marketing efforts.When OPEC raised the price of oil dramatically in the mid-1970s, experts said it was unlikely that the cartel could stay together over the long term-that the incentives for individual members. to cheat would become too strong. More than fort),r years later, OPEC still exists. Why do you think OPEC has been able to beat the odds and continue to collude? Hint: You may wish to consider non-economic reasons.
- Sometimes oligopolies in the same industry are very different in size. Suppose we have a duopoly where one firm (Film A) is large and the other film (Film B) is small, as the prisoners dilemma box in Table 10.4 shows. Assuming that both films know the payoffs, what is the likely outcome in this case?50 40 30 20 10 200 400 600 B00 1000 Quantity per period Suppose there are no fixed costs and marginal cost is a constant $30. a. What sre the perfectiy competitve price and output? Price: $ 30 0 Output: 500 b. What are the cartel (monopoly) price snd output? Price: S 40 0 Output: 300 O c lfthere are only four firms in the cartel, what are the price and output of esch firm, assuming equal shares? Round your anawers to 1 decimal plece. Price:$ 40 0 Output: 75 0 sanuana pue SsogTwo firms dominate the market for surgical sutures and competeaggressively with respect to research and development. The followingpayoff table depicts the profit implications of their different R&Dstrategies.a. Suppose that no communication is possible between the firms; eachmust choose its R&D strategy independently of the other. Whatactions will the firms take, and what is the outcome?b. If the firms can communicate before setting their R&D strategies,what outcome will occur? Explain.Firm B’s R&D SpendingLow Medium HighLow 8, 11 6, 12 5, 14Firm A’s R&D Medium 12, 9 8, 10 6, 8 SpendingHigh 11, 6 10, 8 4, 6
- a. An oligopoly arises when have all or most of the sales in an industry. If oligopolists with the same marginal costs and no fixed costs compete against each other in price, it leads to all firms b. If oligopolists cooperate, they can act as resulting in . Which factors have the potential to develop an oligopolistic market? the granting of a limited number of patents high economies of scale I identical products I low costs of entry a 46°FProposed mergers in an industry with a post-merger HHI more than 2500 are always challenged. O True FalseGame Theory Question Consider the following normal form entry deterrence game between an incumbent monopolist and a potential entrant. Potential entrant Stay out 400,0 Enter PH 200,40 Incumbent PL 100,-10 150,0 a) Can you find any pure strategy Nash equilibrium/a in this game? b) Assume playing mixed strategies, find their best response functions and draw them in a diagram. c) Assume the incumbent firm can observe the opponent's choice before he decides and that the potential entrant knows this, will the potential entrant enter? d) Write down the sequential (extensive form) game and find the subgame perfect equilibrium. Explain the outcome. e) How many strategies does each player have?
- Question 18 Dollars bon 0 MR g Output hj MC ATC The diagram above shows kinked demand and marginal revenue curves for a non-collusive oligopolist. What basic assumption is used to create this kinked structure) O firms ignore action of rival hems Orivals will match both a price increase and a price decrease Crivals will match a price increase but ipnore a price decrease rivals will ignore a price increase but match a price decrease No newThe following question pertains to ologopoly pricing. a. The following question pertaihs to dominant firm price leadership. Suppose a dominant firm has determined the price for its industry. Then suppose there is an increase in hte price of a substitute product. How will the dominant firm's price, dominant firm's quality, and the fringe firms' quality be affected? Please provide an explanation.6 Company X, Company Y, and Company Z have formed an oligopoly. Company X raises its prices, but Company Y and Company Z do not. Which of the following will likely occur? A Company Y and Company Z will form a duopoly. BO The sales of Company X will decline slightly. CO The sales of Company X will decline sharply. DO Company X will have significant, sustained profit increases.