Question 2 The nuts industry has a history of being highly concentrated. In 1980, the four largest firms controlled much of the market share. Plonters led the industry with a 29% market share, followed by HT Foods at 32%, Panamanian Nuts at 14%, and Toatsi at 10%. A price increase by one firm was typically matched by price hikes from the others. Each year, the big four firms heavily advertised and distributed millions of coupons to promote consumer loyalty. In 2004, HT Foods acquires Panamanian Nuts and Toatsi which resulted in skyrocketing prices. Many consumers complained about inflated prices and investigations were conducted by the authorities. i. State what market structure exists in the nuts industry during the 1980s. Can excess profit be earned in this industry in the long run. Explain. ii. State what market structure exists in since the early 2004. Explain if excess profit will exist in the long run. iii. Illustrate and explain how equilibrium is determined in the nuts industry since 2024. iv. Are the firms in the industry operating efficiently in (i) the 1980s; and (ii) presently? Explain.v. Provide an explain one (1) strategy that the authorities can implement to curb prices in the nuts market.
Question 2 The nuts industry has a history of being highly concentrated. In 1980, the four largest firms controlled much of the market share. Plonters led the industry with a 29% market share, followed by HT Foods at 32%, Panamanian Nuts at 14%, and Toatsi at 10%. A price increase by one firm was typically matched by price hikes from the others. Each year, the big four firms heavily advertised and distributed millions of coupons to promote consumer loyalty. In 2004, HT Foods acquires Panamanian Nuts and Toatsi which resulted in skyrocketing prices. Many consumers complained about inflated prices and investigations were conducted by the authorities. i. State what market structure exists in the nuts industry during the 1980s. Can excess profit be earned in this industry in the long run. Explain. ii. State what market structure exists in since the early 2004. Explain if excess profit will exist in the long run. iii. Illustrate and explain how equilibrium is determined in the nuts industry since 2024. iv. Are the firms in the industry operating efficiently in (i) the 1980s; and (ii) presently? Explain.v. Provide an explain one (1) strategy that the authorities can implement to curb prices in the nuts market.
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