Answered: In view of the empirical evidence, what…

In view of the empirical evidence, what factors do you think might be responsible for the current trends of increasing size and mergers

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 10P

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Economists believe mergers can sometimes achieve greater efficiency than two companies that do not merge. true or false
Categorize each of the following examples as a horizontal, vertical, or conglomerate merger.
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Elon Musk, the richest man in the world, currently controls two companies, Tesla, which manufactures electric cars, and SpaceX, which manufactures spacecraft for exploration of space. These two companies are currently independently operated. If they were to merge, would such a merger be considered a horizontal, vertical, or conglomerate merger? Please give an explanation.
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The graph that accompanies this question illustrates two demand curves for a firm operating in a differentiated-product oligopoly. Initially, the firm charges a price of $60 and produces 10 units of output. One of the demand curves is relevant when rivals match the firm’s price changes; the other demand curve is relevant when rivals do not match price changes. a. Which demand curve is relevant when rivals will match any price change? b. Which demand curve is relevant when rivals will not match any price change? c. Suppose the manager believes that rivals will match price cuts but will not match price increases. (1) What price will the firm be able to charge if it produces 20 units? (2) How many units will the firm sell if it charges a price of $70? (3) For what range in marginal cost will the firm continue to charge a price of $60?