ECON 312 Week 1 Quiz

Answer the next question on the basis of the following production possibilities tables for countries Alpha and Beta:

2. Competitive situation analysis: wether a company is in free competition, oligopoly, monopolistic competition or monopoly market. To understand this

In Exhibit 2-19, the production possibilities curves for a country are shown for the years Year X and Year Y. Which of the following could have caused a shift for Year X to Year Y in production possibilities curves?

Select one (1) global industry, such as the automobile or cell phone industry. Next, use the Internet to research three (3) major international competitors within the chosen industry. Take note of manner in which the popular international business press (e.g., newspapers, magazines, e-zines, press releases, etc.) depicts the selected companies.

(b) How would you characterize the nature of the competition between Coke and Pepsi and how has it impacted the profits of the US carbonated soft drinks (CSD) industry as a whole? [20% points]

4. How will you defend against the new competition? What other alternative strategic choices one could come up with? Among them, what would be the best solution of your choice that is most effective to fight against the new competition?

The industry in which the company operates can be characterized as monopolistic competition. This is because, since there are no barriers to entry in this industry, threats of entry by potential entrants has made the industry some-what competitive. But the brand loyalty gained by the firms through massive advertising has rendered the firms within

Suppose we can divide all the goods produced by an economy into 2 types: consumption goods and capital goods. Capital goods such as machinery, equipment, and computers, are goods used to produce other goods.

The company is the production and pricing policy terms highly interdependent with each other. Thus, oligopolistic companies do not change the price, but their performance non-price competition.

According to Salvatore, the oligopoly market structure is most predominant in the manufacturing segment of the industrialized countries which includes the United States (2007). Some types of oligopoly companies are “steel, automobiles, aluminum, soaps and detergent, glass, cigarette, electrical equipment and breakfast cereals” (Salvatore, 2007). The following are some of the recurring characteristics of an oligopoly: (1) only a few firms participate in a particular market place but bigger than the typical company as it pertains to the size of the companies, (2) these firms offer similar products and/or services or somewhat

1. Intensity of direct competition characterized by excess production capacity, standardized products or services, many competitors, low growth

Next, is Monopolistic Competition. This type of market structure is a combination of both a monopoly and perfect competition. The industry will be made up of numerous companies who have "substitute products" but whose products may have special features or benefits which enable them to differentiate themselves from their competition (Gilani, n.d.). In addition, the readiness of buyers to purchase these products allows new businesses to easily enter the industry (Reynolds, 2005). An example of monopolistic competition would be in the fast-food industry, specifically the pizza market (Gilani, n.d.).

Explain how economic systems attempt to allocate and make effective use of resources available within the country (2 a) (A1T2Q4)

Suppose that the two goods that the country AMP produces Apples and Mobile phones. If the production possibility frontiers (PPF) were a straight line, the additional of the unit of mobile phones required to forgone the unit of apples. For example, to move to point A to point B (in order to produce 200 mobiles phones) 50 apples must be forgone. To move point b to point c (to gain another 200 mobile phones), 125 apples must be forgone.

4. The industry have a monopoly in it’s field. It have a very few, but big competitors. How does it face the competitors?