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I need assisting with these question on Economics?
1.In the market for bottled water, Fresh Springs has a 40 percent share of the market, Swiss Springs has a 27 percent share, L'eau de France has a 8 percent share, and Rocky Mountain Water has a 5 percent share. The rest of the market consists of 20 firms with a 1 percent share of the market each. What is the value of the Herfindahl-Hirschman index? 2.True or False: If a natural monopoly succeeds at capturing the regulator, then the monopoly will produce the quantity at which MC=MR. 3.True or False: The Robinson-Patman Act amended and further refined the Clayton Act. 4.True or False: A merger between two firms in a supplier-purchaser relationship is called a vertical merger. 5.True or False: The per se criterion was an antitrust law guideline that emphasized price over quantity. 6.True or False: The Celler-Kefauver Act was passed to close a loophole regarding certain asset acquisitions and acquisitions involving firms that were not direct competitors. 7.True or False: Sometimes referred to as the Anti-Merger Act, the Celler-Kefauver Act gave the government the ability to prevent vertical mergers and conglomerate mergers which could limit competition. 8.Suppose that the Britney Spears decides to get into the thighmaster business too! Britney makes the claims that her thighmaster is better than the thighmaster of Suzanne Somers and makes the claim if one uses her thighmaster, the user will lose 5 inches! Would this be an example of deceptive advertising? Who is responsible for the regulation of these “deceptive” practices? Explain. 9.Suppose there are 4 construction companies in the area: Somdah and Brothers; Maurice Inc.; Dennis, Sanders, and Paul; and Butler Incorporated. These construction companies do rather well in the construction industry. The president of Somdah and Brothers decides to get the remaining three construction companies together to chit chat about prices of their projects and what future projects they are bidding on. During the conversation, the president of Maurice Inc asked everyone that in order to make their lives easier and make more money (leading to higher profits), they should split up the future bids of the contracts and bid on their assigned construction project. Then, the president of Dennis, Sanders and Paul said they had a copy of bids from other construction companies: Beach Construction and Shadow Inc, so they know how to bid even better on these contracts. Is there any evidence of antitrust violations in this scenario? Explain. 10.In a press release by Somdah and Brothers on their website, they were able to acquire three additional construction companies and are able to expand and dominate in the local market for construction services. Is this a potential violation of the antitrust laws? Explain.
Public Comments
- 1. 0.4^2 + 0.27^2 + 0.08^2 + 0.05^2 + 20*0.01^2 ^2 means squared 2. True. That's the condition for unregulated monopoly 4. Yes, that's the definition 9. That's collusion (forming a cartel), and it's illegal 10. If they indeed dominate the market, it is a violation of the law. Dominating firm has price-setting power similar to monopolist, and an unregulated monopoly will hurt consumers and reduce total welfare.
