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- 9. Antitrust laws Cooperation among oligopolies runs counter to the public interest because it leads to underproduction and high prices. In an effort to bring resource allocation closer to the social optimum, public officials attempt to force oligopolies to compete instead of cooperating. Consider the following scenario: Suppose that the presidents of two auto manufacturing companies exchange text messages in which they discuss jointly raising prices on their new lines of hybrid SUVs. This illegal communication would violate which of the following laws? The Sherman Antitrust Act of 1890 The Celler-Kefauver Act of 1950 The Robinson-Patman Act of 1936 The Clayton Act of 1914Bubble Wrap Ca (BWC), an Atlanta corporation, has its principal place of business in New York John, a resident of Florida, falsely asserted on his website that BWC is engaged in ongoing criminal activity, scams, and phishing BWC sued John in the US. District Court for the District of New York, alleging defamation and injury to BWC's business in New York. John filed a motion to dismiss the case alleging that neither subject-matter nor in personam jurisdiction existed. The court granted the defendant's motion and dismissed the cane. What is the best reason? A. The court does not have in personam jurisdiction. B. The court does not have subject-matter jurisdiction C. There is no subject-matter jurisdiction nor in personam . . jurisdiction. D. The Statement do not amount to defamation.1. Sources of monopoly power A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity demanded falling to zero. The main way it retains its market power is through barriers to entry-that is, other companies cannot enter the market to create competition in that particular industry. Complete the following table by indicating which barrier to entry appropriately explains why a monopoly exists in each scenario. Barriers to Entry Exclusive Ownership of a Key Government- Created Economies Scenario Monopolies of Scale Resource In the natural gas industry, low average total costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary pipes and hoses makes it risky and, most likely, unprofitable for competitors to enter the market. In an imaginary country, there is only one federally licensed lottery agency in any state; that is, it is impossible for any private firm to…
- 1. Sources of monopoly power A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity demanded falling to zero. The main way it retains its market power is through barriers to entry-that is, other companies cannot enter the market to create competition in that particular industry. Complete the following table by indicating which barrier to entry appropriately explains why a monopoly exists in each scenario. Barriers to Entry Exclusive Ownership of a Key Government- Created Economies Scenario Resource Monopolies of Scale Patents are granted to inventors of a product or process for a certain number of years. The reason for this is to encourage innovation in the economy. Without the existence of patents, it is argued, research and development for improved electronics is unlikely to take place, since there's nothing preventing another firm from stealing the idea, copying the product, and producing it without incurring the…Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.1.Some monopolies are regulated by setting a price that a monopolist cannot exceed over a specified period of time. This is called: A)price cap regulation B)regulatory capture C)antitrust laws D) cost-plus regulation 2.Let's say that the equilibrium salary for professors is $70,000/year. If universities pay an average of $90,000/year, we can expect a ___________ of professors. A)shortage B)surplus C)monopoly D)union 3.If college education becomes a requirement for working in a fast-food establishment, we may experience a _____________ in the supply of potential fast-food workers. A)increase B)rightward shift C)decrease D)surge 4.Minimum wage laws are examples of price floors, where an employer is: A)Not allowed to pay wages higher that what is set by the law B)Should pay all workers the minimum wage set by the law C)Not allowed to pay wages lower than what is set by the law D)Not allowed to hire people who asks for wages higher than what is set by the…
- 4) Application problems (Topic 9 & 10) Perfect Competition versus Monopoly: A small country town is served by many competing (price-taking) fruit and vegetable shops, who all have the same marginal costs. They then get together and decide to operate as one large monopoly firm. Using the diagram below, answer the following questions: (a) * What was the equilibrium price and quantity in this market when the firms were competing each other? What is the new price and quantity once they form a monopoly? (b) aga *** What was the dollar value of the consumer and producer surplus under (i) perfect competition, and (ii) under monopoly? What, if any, is the size of the deadweight loss implied by this market transitioning into a monopoly? Price $23 I Supply EMC $13 $10.5 $9 $3 1.000 Demand Marginal Revenue 1.250 Quantityg, h and I(Regulating Natural Monopolies) The following graph representsa natural monopoly.a. Why is this firm considered a natural monopoly?b. If the firm is unregulated, what price and output wouldmaximize its profit? What would be its profit or loss?c. If a regulatory commission establishes a price with thegoal of achieving allocative efficiency, what would bethe price and output? What would be the firm’s profitor loss?d. If a regulatory commission establishes a price with thegoal of allowing the firm a normal profit, what would bethe price and output? What would be the firm’s profitor loss?e. Which one of the prices in parts b, c, and d maximizesconsumer surplus? What problem, if any, occurs at thisprice?
- 2. How important is social media for the transmission of political information within contemporary American politics? What are some potential advantages and disadvantages to reliance on social media for political information? 3. Do you think that negative campaign ads are effective? If so, in what ways are they effective? If not, then why are they ineffective?(15 marks) Public utilities, like local electricity providers, are likely natural monopolies. They are typically regulated by the government with a rate-of-return regulation. Explain why public utilities like local electricity providers are natural monopolies. Explain the economic rationale behind the rate-of-return regulation on a natural monopoly. Given your above arguments, discuss whether the government should regulate firms other than a natural monopoly with this method.Which of the following matrices correctly underlines the appropriate strategies for players 1 and 2, and comes to a reasonable solution or equilibrium point in the game? Player 2 Confess Keep Quiet Confess -8,-8 0, -12 Player 1 Keep Quiet Confess Player 1 Keep Quiet -12,0 Confess -8,-8 -12, 0 Player 2 -2,-2 Keep Quiet 0, -12 -2,-2
