This chapter discusses companies that areoligopolists in the markets for the goods they sell.Many of the same ideas apply to companies that areoligopolists in the markets for the inputs they buy.a. If sellers who are oligopolists try to increase theprice of goods they sell, what is the goal of buyerswho are oligopolists?b. Major league baseball team owners have anoligopoly in the market for baseball players. Whatis the owners’ goal regarding players’ salaries?Why is this goal difficult to achieve?c. Baseball players went on strike in 1994 becausethey would not accept the salary cap that theowners wanted to impose. If the owners werealready colluding over salaries, why did they feelthe need for a salary cap?
This chapter discusses companies that are
oligopolists in the markets for the goods they sell.
Many of the same ideas apply to companies that are
oligopolists in the markets for the inputs they buy.
a. If sellers who are oligopolists try to increase the
price of goods they sell, what is the goal of buyers
who are oligopolists?
b. Major league baseball team owners have an
oligopoly in the market for baseball players. What
is the owners’ goal regarding players’ salaries?
Why is this goal difficult to achieve?
c. Baseball players went on strike in 1994 because
they would not accept the salary cap that the
owners wanted to impose. If the owners were
already colluding over salaries, why did they feel
the need for a salary cap?
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