In 2006, the five leading suppliers of digital cameras in the United States were Canon, Sony, Kodak, Olympus, and Samsung. The combined market share of these five firms was 60.9 percent. The leading firm was Canon, with a market share of 18.7 percent. The own price elasticity for Canon’s cameras was –4.0 and the market elasticity of demand was –1.6. Suppose that in 2006, the average retail price of a Canon digital camera was $240 and that Canon’s marginal cost was $180 per camera. Based on the above information, discuss industry concentration, demand and market conditions, and the pricing behavior of Canon in 2006 and explain how the industry environment significantly influence the performance of the digital camera firms

In 2006, the five leading suppliers of digital cameras in the United States were Canon, Sony, Kodak, Olympus, and Samsung. The combined market share of these five firms was 60.9 percent. The leading firm was Canon, with a market share of 18.7 percent. The own price elasticity for Canon’s cameras was –4.0 and the market elasticity of demand was –1.6. Suppose that in 2006, the average retail price of a Canon digital camera was $240 and that Canon’s marginal cost was $180 per camera. Based on the above information, discuss industry concentration, demand and market conditions, and the pricing behavior of Canon in 2006 and explain how the industry environment significantly influence the performance of the digital camera firms

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.10P: Inverse elasticity rule Use the first-order condition (Equation 15.2 ) for a Cournot firm to show...

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In 2006, the five leading suppliers of digital cameras in the United States were Canon,Sony, Kodak, Olympus, and Samsung. The combined market share of these five firmswas 60.9 percent. The leading firm was Canon, with a market share of 18.7 percent. Theown price elasticity for Canon’s cameras was –4.0 and the market elasticity of demandwas –1.6. Suppose that in 2006, the average retail price of a Canon digital camera was$240 and that Canon’s marginal cost was $180 per camera. Suppose you were the CEO of Kodak, what would you do to avoid its business failure? Please apply the specific tools from managerial economics to the case analysis
In 2006, the five leading suppliers of digital cameras in the United States were Canon,Sony, Kodak, Olympus, and Samsung. The combined market share of these five firmswas 60.9 percent. The leading firm was Canon, with a market share of 18.7 percent. Theown price elasticity for Canon’s cameras was –4.0 and the market elasticity of demandwas –1.6. Suppose that in 2006, the average retail price of a Canon digital camera was$240 and that Canon’s marginal cost was $180 per camera.Based on the above information, discuss industry concentration, demand and market conditions, and the pricing behavior of Canon in 2006 and explain how the industry environment significantly influence the performance of the digital camera firms.
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