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- As an international manager of a US business that has just developed, I would export the computer from the US because I will have full control of how the computer will be manufactured and distributed to Europe. Another pro that I would consider to export from the US is that the patent would be able to protect the design of the computer, which will reduce the result of the property being an infringement. A con from exporting from the United States that it would cost more money from the taxes, duties, and the trade barriers that are from Western Europe. Another con would be that it would take much longer to exist something from over seas. First, I will start with the cons of the process where you might not have full control over the manufacturing process, which can really impact the product of the computer. This can significantly be a bad idea. A pro of having to license a European firm to manufacture and market the computer in Europe would be how they know all of the distribution…Question 1.Assume there are only two art auction companies who account for 100% of all the sales of 19thCentury impressionist master work paintings in the world. Assume that each company buys thiskind of painting and then resells the paintings at monthly auctions. Ignoring the question of anylaws that might apply, describe what economic arrangement would maximize the twocompanies’ total profits? Show with supply and demand curves what profit they would makefrom this arrangement and what societal welfare loss, if any, results from it.Critical Thinking In many oligopolistic industries, firmsfollow a price leadership strategy, in which an accepted industry leader sets, raises, or lowers prices and theother firms follow. In what ways is this policy good andbad for the industry? In what ways is this good or badfor consumers? Whal is the difference between priceleadership and price fixing? Should governments al- low industries 10 use price leadership strategies? If not,how can they prevent it?
- Each time a song is played on the radio, the record company and the songwriter are paid a royalty of $0.30.Of the total, 75% goes to the company and the rest to the writer. If on a network of 50 radio stations, a certainsong is played 4 times a day during the first week and then 20 times a day for the next three weeks, how muchdoes the network owe in royalties for the four weeks? How much do the record company and the songwriterreceive eachGive atleast 3 examples in each rivalry.ANS ME ! 1 In a completely serious market, the interaction of section or leave closes when a. Firms are working with abundance limit. b. Firms are making zero monetary benefit. c. Firms experience diminishing minimal income. d. Cost is equivalent to minor expense. 2. Harmony amounts in business sectors described by oligopoly is a. Lower than in imposing business model business sectors and higher than in completely serious markets. b. Lower than in imposing business model business sectors and lower than in completely serious markets. c. Higher than in imposing business model business sectors and higher than in completely serious markets.
- Dr. Heinz Doofenshmirtz and Perry the Platipus have decided to venture into farming. They both participated in the venture eqully well, so at the end of the year, their farm produced five geese, each laying golden egs. Perry and Dr. Doof have to decide how to divide these five geese among themselves -- there are no market where they could sell them and there is not sharing or time-share arrangements possible. In other words, either they use the goose or loose it. Evidently, they cannot split an egg-laying goose in half.(a) Give an example of economically efficient allocation of golden egg laying geese between Perry and Dr. Doof. Briefly explain why the allocation you provide is efficient. (b) Give an example of an allocation of geese between the two that you think is fair (equitable). Briefly explain why it is fair in your opinion. (c) If the allocation in (a) is not the same as the one in (b), is it possible to come up with an allocation of geese that would be both efficient and…a. What evidence is there to indicate that the UK supermarket business is an oligopoly? What further evidence might you need to be more certain that this is the case? b. Comment on the suggestion that Tesco’s position as price leader is being undermined. c. Other than price cutting, analyse the ways in which the Big Four might restrict the growth of new entrants such as Aldi and Lidl. d. Discuss the extent to which the stores wars described above is in the best interests of the UK consumers. The supermarket business in the UK is dominated by the so-called ‘Big Four’. Their market shares in March 2014 are shown below:Tesco .................. 28%Asda ................... 19%Sainsburys .......... 18%Morrisons ........... 11%Other established supermarkets, notably the Co-operative and Waitrose, are way behind with market shares of 5–6%. Over the year to March 2014, Tesco and Morrisons have lost out whilst the other two have hung on to retain or marginally increase their market share.…Two firms dominate the market for surgical sutures and competeaggressively with respect to research and development. The followingpayoff table depicts the profit implications of their different R&Dstrategies.a. Suppose that no communication is possible between the firms; eachmust choose its R&D strategy independently of the other. Whatactions will the firms take, and what is the outcome?b. If the firms can communicate before setting their R&D strategies,what outcome will occur? Explain.Firm B’s R&D SpendingLow Medium HighLow 8, 11 6, 12 5, 14Firm A’s R&D Medium 12, 9 8, 10 6, 8 SpendingHigh 11, 6 10, 8 4, 6
- 8. Two states, A and B, have signed an arms-control agreement. This agreementcommits them to refrain from building certain types of weapons. The agreement is supposed tohold for an indefinite length of time. However, A and B remain potential enemies who wouldprefer to be able to cheat and build more weapons than the other. The payoff table for A (player1, the row player) and B (player 2, the column player) in each period after signing thisagreement is below. a) First assume that each state uses Tit-for-Tat (TFT) as a strategy in this repeated game.The rate of return is r. For what values of r would it be worth it for player A to cheat bybuilding additional weapons just once against TFT? b) For what values of r would it be worth deviating from the agreement forever to buildweapons? c) Convert both values you found in parts a and b to the equivalent discount factor dusing the formula given in lecture and section. d) Use the answers you find to discuss the relationship between d and r:…Return to Figure 9.2. Suppose P0 is $10 and P1 is$11. Suppose a new firm with the same LRAC curve asthe incumbent tries to break into the market by selling4,000 units of output. Estimate from the graph what thenew firm’s average cost of producing output would be.If the incumbent continues to produce 6,000 units, howmuch output would the two firms supply to the market?Estimate what would happen to the market price as aresult of the supply of both the incumbent firm andthe new entrant. Approximately how much profit wouldeach firm earn?For many years, the Justice Department has tried to break up large firms like IBM,Microsoft, and most recently Google, on the grounds that their large market share madethem essentially monopolies. In a global market, where U.S. firms compete with firms fromother countries, would this policy make the same sense as it might in a purely domesticcontext?