LH Industrial Organisation – Week 7 Seminar – Cartels
LH 工业组织代写 In all cases, I am looking for discussion and justification. I’d expect you to discuss things like product homogeneity
1.Suppose that a duopoly faces inverse demand p = 120 – Q, where Q is the total output of firms in the market. Suppose that firms have the same costs, TCi = 20qi, where i=1,2.
a) If the duopolists form a cartel, what would be the cartel price and market level of output? LH 工业组织代写
b) Without knowing more about the cartel, explain why you cannot calculate the output and profit levels for each firm.
a) Price is 70, output is 50
b) The FOCs of profit maximisation don’t tell us how output is divided between the two firms.
2.Assume that a cartel agreement involves an even split of market share. Demonstrate that the Cartel Dilemma is more of an issue where there are a greater number of firms in the market. LH 工业组织代写
There are a few different ways you could show this!
3.For each pair of industries given below, discuss which of the two is most likely to result in successful collusion.
- a) Steel or automobiles.
- b) Cement or wheat.
- c) Fast food or airline services between two cities.
In all cases, I am looking for discussion and justification. I’d expect you to discuss things like product homogeneity, ease of entry, transparency, firm numbers, etc.
In the UK, if you shop at Tesco supermarket, they often cite low-price guarantees in the form of ‘Aldi price match’. Are these guarantees beneficial or harmful to LH 工业组织代写
consumers? Explain. I am fairly sure we essentially covered this in a pre-recorded video. On the fact of it, it seems to be good for consumers – but actually it is just a way of keeping prices high (Aldi has no incentive to undercut).
Suppose you were looking for an industry in which to form a cartel. Given the empirical evidence we discussed in the lecture, what would be the ideal set of
conditions that would maximise the likelihood of cartel success? Which industries would you say are good candidates for a cartel? Explain.
Again, discuss. Follows from the materials covered this week.
6. Given the similarities in terms of the products involved, discuss why the lysine cartel was less successful than the international vitamins cartel. LH 工业组织代写
Some research is necessary…
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