EBK ECONOMICS: PRINCIPLES AND POLICY
13th Edition
ISBN: 9780100605930
Author: Blinder
Publisher: YUZU
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Chapter 13, Problem 8DQ
To determine
The industries with a high concentration ratio.
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Prior to 1995, Taiwan had only one beer producer, a government-owned monopoly called Taiwan Beer. Suppose that while it was a monopoly, the company was
run in a way to maximize profit for the government. That is, assume that it behaved like a private, profit-maximizing monopolist. Assuming demand and cost
conditions are given on the following diagram, at what level would Taiwan Beer have targeted output and what price would it have charged?
Now suppose that while it was a monopoly, Taiwan Beer decided to compete in the highly competitive American market. Assume further that Taiwan maintained
import barriers so that American producers could not sell in Taiwan but that they were not immediately reciprocated.
Assuming Taiwan Beer could sell all that it could produce in the American market at a price P = Pu.s., indicate the following:
Total output is given by
Initial output sold in Taiwan is given by
The new price in Taiwan after the U.S. market opens is
The output sold in the U.S. is…
The graph below represents sales per week of ABC Inc. Ltd, a monopoly multinational enterprise that supplies Hi-tech components. Use the graph to answer the questions that follow.
Suppose the demand and cost curves result in ABC Inc. Ltd earning an economic profit. Do you think ABC Inc. Ltd firm will earn profit in the longrun? Explain your answer. Assume all factors constant.
Examine the effects of ABC Inc. Ltd on consumers.
Use the following table to calculate the four=firm concentration ratio for the U. S. auto market. Does this indicate a concentrated market or not? The table is............. GM 19% Ford 17% Toyota 14% Chrysler 11%
Chapter 13 Solutions
EBK ECONOMICS: PRINCIPLES AND POLICY
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