Introduction to the Potato Chip Industry

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The potato chip industry 1. Introduction Four years ago, the potato chip industry was formed from several companies, each producing and selling their own products within a monopolistic competitive structure. In other words, the products created and sold were slightly different, so that they were not perfect substitutes for each other. The economic agents as such competed on different segments and were able to implement the prices they saw fit, without creating or sensing influences from the other players in the market. Today however, the structure of the market has changed dramatically, after two lawyers purchased and united all of the potato chip firms. In such a setting, the entire industry is now run as a monopoly, called "Wonks". In such a setting, three important questions are raised, as follows: What is the impact of the new potato chip monopoly on the various categories of stakeholders? What changes are expected to occur at the level of prices and outputs, based on the transition from the monopolistic competition to the monopoly?, and last What is the most beneficial market structure in which Wonks would operate and would the same market structure also be beneficial for the customers? 2. Impact on stakeholders The stakeholders represent the totality of groups and individuals who impact the firm or who are impacted by the actions or decisions of the firm. At any level or another, there exists a link between the stakeholders and the company. Some of

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