Theory or theories of harm:
Refusal to deal, monopoly
Negative impact on price (added the price of a licence) and negative impact on quantity (originally refused to allow the French to purchase fresh bait then later changed to requiring to purchase a license.
1. This assignment is all about establishing the potential harm and benefit from the situation you are studying. Question 1 asks about harm.
1A.
Draw a diagram (or diagrams) in which you clearly illustrate the potential harm to society from the background reference file on The Bait act of 1800.
For example, if you are looking at a monopoly in a market that, without the monopoly, would probably be perfectly competitive, you could draw two diagrams: one showing price, quantity and surplus in a perfectly competitive market, and one showing price, quantity, surplus and the deadweight loss under monopoly.
These diagrams do NOT have to be perfectly to scale (even if you have numbers, which is not necessarily the case). General sketches are fine.
Please make sure your diagrams are in GIF, JPG, TIFF, PNG or PDF format. You may put them directly in this word document or upload them as separate files (e.g. as a separate image taken from your phone).
[Insert diagram here]
1B.
Explain the reason for the harm using a combination of the background reference file / information and economic reasoning & theory. Cite any sources used in APA format.
For example, in class we learned that when Australia had trouble recovering costs for its power grid, a consulting report
iefly considered charging higher fixed fees to users with less elastic demand. If this is was your topic, you could explain the need for cost recovery in a marginal cost pricing context leading to the use of fixed fees, that on paper a social planner would want to charge the highest fees to those with the least elastic demand to minimize deadweight loss, but that in the Australian situation, those with least elastic demand also happened to be very light (and often very poor) users of electricity: their demand was inelastic because they were already consuming as little as possible. Charging them high fixed fees could cause a lot of harm.
[Insert explanation here]
Cite any sources used in APA format:
1C.
Try to attach numbers to the harm from the situation you are studying. If quantity is lower than it should be, by how much? If price is higher, by how much? If product quality or variety falls, what exactly do you mean? This is a very important part of competition policy analysis, but also very difficult because this information tends to be private.
Using information obtained from reliable sources (company or government documents, reliable news reports, peer-reviewed papers, etc.), QUANTIFY the harm done by the situation you are looking at. Show your calculations, cite your sources in APA format and explain your thought process in such a way that the instructor can understand your calculations.
It’s fine to get a math program or web site (Excel, Wolfram Alpha, etc.) to do the arithmetic, alge
a and calculus for you – but I need to see you set up and explain the equations, etc. that you have those programs solve.
[Insert numbers, explanations and calculations here]
Cite any sources used in APA format:
2. This assignment is all about establishing the potential harm and benefit from the situation you are studying. Question 1 asks about benefits.
2A.
Draw a diagram (or diagrams) in which you clearly illustrate the potential benefit to society from the situation you are studying. There needs to be at least one.
For example, suppose you are looking at a merger to monopoly of a type of shop that had previously been so competitive that there were rival shops on every corner. (For example, a McDonald’s and a Burger King.) Now you would need only one shop – maybe slightly expanded – where before there had been two, which could lower fixed and marginal costs. That would represent an efficiency gain to society, and could help counteract the deadweight loss of monopoly. Your diagrams could show quantity, output & surplus before and after the merger.
These diagrams do NOT have to be perfectly to scale (even if you have numbers, which is not necessarily the case). General sketches such as those used in the lecture notes are fine.
Please make sure your diagrams are in GIF, JPG, TIFF, PNG or PDF format. You may put them directly in this word document or upload them as separate files (e.g. as a separate image taken from your phone).
[Insert diagram here]
2B.
Explain the reason for the benefit above using a combination of background information and economic reasoning & theory. Cite any sources used in APA format.
If you were looking at mergers among food retailers, a Google Scholar search would quickly lead you to an article called “Food Retailing: Mergers, Leveraged Buyouts, and Performance” by R. W. Cotterill. This article mostly lists negative impacts of these mergers, but there is one very interesting positive one: food retailing mergers lead to a lot of debt for the merged company, and this has sped up the adoption of cost-reducing technology, relative to what would have been seen before. Fewer retailers also mean each retailer has more bargaining power, which could lead to lower wholesale costs. In this specific market (retail, not wholesale), that could be seen as an efficiency. This would be a good start to this section, and all just from an abstract – reading the paper (and sources it cites) could give you a better idea of the basic economic reasoning and theory behind the efficiency results (and how applicable they are to your specific situation).
[Insert explanation here]
Cite any sources used in APA format:
2C.
Try to attach numbers to the benefit from the situation you are studying. If quantity is higher than it would otherwise be, by how much? If price or costs are lower, what prices or costs, and by how much? If product quality or variety increases, what exactly do you mean? This is a very important part of competition policy analysis, but also very difficult because this information tends to be private.
Using information obtained from reliable sources (company or government documents, reliable news reports, peer-reviewed papers, etc.), QUANTIFY the possible benefits done by the situation you are looking at. Show your calculations, cite your sources in APA format and explain your thought process in such a way that the instructor can understand your calculations.
It’s fine to get a math program or web site (Excel, Wolfram Alpha, etc.) to do the arithmetic, alge
a and calculus for you – but I need to see you set up and explain the equations, etc. that you have those programs solve.
[Insert numbers, explanations and calculations here]
Cite any sources used in APA format:
1
Topic ___Newfoundland`s Bait Acts of the 1800s
Newfoundland`s Bait Acts of the 1800s
This background provides the history during the 1800’s of how “Bait” directly affected Newfoundland’s “Salt Cod” exports and how this led to the Bait Act of 1887. The fish were cured by drying and salting, then marketed mainly to Europe.
The Newfoundland salt-cod fishery was the lifeblood of Newfoundland and La
ador's economy during the nineteenth century. It consisted of three parts: an inshore fishery off the island's coast, a La
ador fishery, and an offshore bank fishery. Both cod and he
ing are cold water fish and were found abundantly in the northern Atlantic waters around Newfoundland. The prime fishing season was May to September, due to the migratory patterns of cod.
In 1816, the British returned the islands of the St. Pie
e and Miquelon to France. French fishermen returned and took up residence with the main purpose of exporting fish to European markets (Janzen, XXXXXXXXXXThereafter, the Newfoundland coast cod fishery was shared seasonally every summer by the English and French. Eventually, as a result of the wars of the early eighteenth century, France gave up its fishery on the south coast and received in return the right to fish on the west coast and Northern Peninsula. They retained this right until 1904, when, by mutual agreement, they relinquished it to the Newfoundland residents. Cod exports fluctuated throughout the 1800’s instead of continuing to increase. There was a decline in the value of Newfoundland cod exports and an especially large fall in the price of its La
ador cod. While the volume of fish exported remained stable, the poor prices meant difficult times for much of the fishing population and a severe reduction of profits for merchants. The merchants believed their difficulty was due to the increasing competition they faced in their area waters from the other producers, mainly Norway, France, Canada and America.
In 1854, the British government established Newfoundland's responsible government and from this point on Newfoundland considered itself to have jurisdiction over its resources, coastline and coastal water. This became a major struggle as the local government fought to extend its control outside of its own area to include the Northern Peninsula and West coast as the bays were being fished by the French, Norwegians, and the Americans. Overall, the Cod fishing industry developed a heavy dependence on Newfoundland for bait, consisting of he
ing, capelin and squid, which was bought in large quantities by all parties.
In the 1800's when the deepening export crisis required more government intervention, the development of a major bait fishery was implemented. Newfoundland bait, especially fresh he
ing, was becoming vastly important to the French and American fishing vessels. As the French fishing business continued to expand, the Newfoundland government attributed this to the government subsidies it was receiving and its ready access to Newfoundland bait. If one or the other could be cut off, then Newfoundland felt French competition could be limited. On the surface it appeared the Newfoundland government had a good case against the French. By the 1880s, the French subsidy to their fisherman allowed their fishermen to make a profit off their exports. On the other hand, Newfoundland fishermen were receiving less than a
eakeven price per quintal for their fish (Willmore, 2019, Econ321 lecture 3). It was decided that in order to improve their competitive position, measures directed against the French needed to be taken.
William Whiteway, Newfoundland’s premier at the time, was prepared to make a bargain with the French as he felt they had useful concessions to make in relation to his policy of progress. Negotiations between London and Paris went on for several years regarding the French shore fishing. The agreement was almost finalized when Newfoundland’s Premier William Whiteway was replaced by Robert Tho
urn, a