conjectural variations‚ market shape‚ consumer behavior and transportation costs are not taken into account. By using the principle of minimum differentiation and the location model‚ Hotelling wanted to show that price stability was possible within a duopoly without conspiracy (Brown‚ 1989). H2) Discuss weaknesses of Hotelling’s model. After the publication of Hotelling’s paper (‘Stability in Competition’)‚ a lot of research has been done into the principle of minimum differentiation (Brown‚ 1989)
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Beauregard Textile Company Eugenio J. Miravete Relevant Market Infomation • Duopoly in the market of Triaxx-30: – Beauregard Textile Company (BTC). – Calhoun & Pritchard Inc. (CPI). • Pricing is final for each quarter (commitment) and normally BTC announce her price first. • BTC recently raised the price of T-30 from $3 to $4 to align this markup to other fabrics in her product line. • CPI held his price at $3. • CPI and BTC have similar costs. • CPI is in a tight financial situation. •
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Airbus versus Boeing: When is Intervention Not Intervention? 1. Where do you stand? Do you think the EU subsidies and soft loans to Airbus are fair? Why or why not? What advantages does Airbus gain from free financial support from the EU governments? Are complaints about the EU government intervention fair in light of Europe’s long history of democratic socialism? In our opinion the subsidies and soft loans provided to Airbus are unfair and provide them with an unfair competitive advantage.
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The strategic approach extends the single-firm point of view by recognizing that a firm’s profit depends not only on the firm’s own actions but also on the actions of competitors. Thus‚ to determine its own optimal action‚ the firm must correctly anticipate the actions and reactions of its rivals. Roughly speaking‚ a manager must look at the competitive situation not only from his or her own point of view but also from rivals’ perspectives. The manager should put himself or herself in the competitor’s
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The barrier to enter this industry is low only for the local coffee and snack shops because the investment is quite low. Also‚ the foodservice regulations can be achieved and licensing required for this industry is not difficult to obtain. However‚ it would be high enter barrier for these specialty coffee shop or chain shop due to the mature life cycle of coffee and snack shops in Canada and high investment on both physical and human capitals. As stated in the article‚ the industry is concentrated
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Demand and Elasticity Linear demand curve: Q = a – bP Elasticity: E d = (ΔQ/ΔP)/(P/Q) = -b(P/Q) E d = -1 in the middle of demand curve (up is more elastic) Total revenue and Elasticity: Elastic: Ed < -1 ↑P→↓R (↑P by 15%→↓Q by 20%) Inelastic: 0 > Ed > -1 ↑P→↑R (↑P by 15%→↓Q by 3%) Unit elastic: Ed = -1 R remains the same (↑P by 15%→↓Q by 15%) MR: positive expansion effect (P(Q) – sell of additional units) + price reduction effect (reduces revenues because of lower price (ΔP/ΔQ)/Q)
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Table of Contents 1 Introduction 2 2 Determining the Medium and Long Term Growth Rates 4 2.1 Growth in the Telephone Directory Industry 5 2.1.1 Competition 6 2.1.2 Demand for Telephone Lines 9 2.1.3 A Short Summary of the Growth Prospects in the Region 10 2.2 Estimation of the Growth Rates for Argentina 11 2.3 Estimation of the Growth Rates for Brazil 12 2.4 Estimation of the Growth Rates for Chile 13 3 Calculating the Cost of Capital 13 3.1 The Godfrey and Espinosa (1996) Model 14 3
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pricing and output decisions of businessesExplain how market structures in the above case deviate determine the pricing and output decisions of businesses | - Market type as one of perfect competition‚ monopoly‚ monopolistic competition‚ oligopoly‚ duopoly.- Decisions of the company based on competitive advantage‚ strategies and in line with regulation of competition. | | | Illustrate the way in which market forces shape organisational responses using a range of examplesIllustrate the way in which
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Introduction Between the definitions of perfect competition and pure monopoly lie oligopolies and monopolistic competition‚ oligopoly is where there are a few sellers with similar or identical products ‚ which are large enough relative to the total market that they can influence the market price. It is a form for market structure quite common. In many countries‚ the automobile‚ steel‚ petrochemical‚ electrical and computer devices all belong to category of oligopoly market structure. In recent
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COVENANT UNIVERSITY KILOMETER 10‚ IDIIROKO ROAD‚ P.M.B. 1023‚ OTA‚ OGUN STATE‚ NIGERIA COLLEGE OF DEVELOPMENT STUDIES SCHOOL OF SOCIAL SCIENCES DEPARTMENT OF ECONOMICS AND DEVELOPMENT STUDIES 2013/2014 ACADEMIC SESSION OMEGA SEMESTER Course Title: Intermediate Microeconomic Theory II Course Code: ECN 321 Course Lecturers: 1. Prof. George [ Office Number: B109] 2. Miss Adeoye‚ T [Office Number: B114E] Course Objectives This course if the second part of the Intermediate Microeconomic
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