Chapter 11: Q 18 (page 272)
What is a tie-in sale? How might it reduce competition and when might it be acceptable?
Short Answer
Restrictive practice to curb competition.
Chapter 11: Q 18 (page 272)
What is a tie-in sale? How might it reduce competition and when might it be acceptable?
Restrictive practice to curb competition.
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Get started for freeIs it true that a merger between two firms that are not already in the top four by size can affect both the four-firm concentration ratio and the Herfindahl-Hirshman Index? Explain briefly.
Urban transit systems, especially those with rail systems, typically experience significant economies of scale in operation. Consider the transit system data in Table 11.4. Note that the quantity is in millions of riders.
Draw the demand, marginal revenue, marginal cost, and average cost curves. Do they have the normal shapes?
What is a corporate merger? What is an acquisition?
How do we measure a four-firm concentration
ratio? What does a high measure mean about the extent of competition?
Use the following information to answer the next three questions. In the years before wireless phones, when telephone technology required having a wire running to every home, it seemed plausible that telephone service had diminishing average costs and might require regulation like a natural monopoly. For most of the twentieth century, the national U.S. phone company was AT&T, and the company functioned as a regulated monopoly. Think about the deregulation of the U.S. telecommunications industry that has occurred over the last few decades. (This is not a research assignment, but a thought assignment based on what you have learned in this chapter.)
What might some of the negatives of deregulation be?
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