QUIZ 4 ECON 550 MBA page 1 of 3Chapters 7 + 8 30...

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QUIZ 4        ECON 550        MBA                        page 1 of 3Chapters 7 + 8                30 questionsChapter 71. Is it legal in the United States for companies and businesses of similar product to get together and as a group determine pricing for all (refeed to as price fixing)?    Yes, it is Legal   or   No, it is Not Legal and Against the Law2. If there is No differentiation between goods and products (all products are exactly the same) for consumers, is it easy for companiesusinesses to get higher pricing than others and why? 3. What is ‘the Shut Down Point’?   (keep your answer short & simple, this is easy;  do not copy/paste answer)4. In the textbook, it describes ‘the perfect market’ which actually it does not exist.  With this theoretical ‘Perfect Market’ who would this benefit; consumers or businesses/companies and why?5. In this theoretical ‘Perfect Market’, how is this maybe Not good and Not beneficial for advancements, creativity, production improvements and other development efforts?6. In this theoretical ‘Perfect Market’, how does this respect and meet the desires and needs of all consumers  or  does it?7. With the PCM Price Cost Margin concept,  what is the M for Margin;  what is Margin?  (keep this simple & you can actually answer with 1 word;  Hint:  starts with P)8. In the textbook, the case about the trucking market, what happened when there was too much competition and too many trucking firms?9. In the textbook, the case of the trucking market, what happened when many trucking firms shut down?10. With the case of the trucking market, what does this teach you?11. When a companyusiness is in a highly competitive market with many competitors, what must you do to gain competitive advantage and maybe even higher pricing for more profits?12. Briefly in a few words explain what is ‘Elasticity of Supply’; (the textbook used agriculture as a case to explain it)? Page 2 of 313. Now that you understand the concept and realities of ‘Elasticity of Supply’;  this applies to all industries, markets, products, goods and services;  explain what you have learned from this and the importance to other products, services & goods and what to plan for and how?(This is important knowledge & your answer here is important for application to all)Chapter 814. What are the ‘6 Baiers to Entry’ markets?15. For each of the ‘6 Baiers’ iefly explain each of the ‘6 Baiers’?16. What is ‘Consumer Lock-In and Switching Costs?17. Why and how can using Lock-In be a competitive advantage?18. To achieve Lock-in with customers, what must you do and be willing to do?19. In the textbook case about Kleenex,  what did the company Kleenix do to keep & grow their market share when many competitors entered their market to threaten them?20. What is ‘Cross-Price Elasticity of Demand’?  (Keep ief and do not copy paste)21. What is ‘Concentration Ratios?  (keep ief and do not copy paste)22. What is  ‘HHI The Herfindahl-Hirchman Index’ and what does it measure?  (Keep short & do not copy paste)23. What is the importance of the ‘Herfinadahl-Hirchman Index’ and who & how is this used?24. Briefly explain what are ‘US Anti-Trust Laws’/Acts and their importance?25. What is the FTC Federal Trade Commission and what do they do?26. What happened when the big super stores of Staples office supply tried to merge with Office Depot office supply?27. What happened when the giant AT&T phone networks & products tried to merge with the giant T-Mobile?page 3 of 328. Why is it important for managers to understand US Antitrust Laws?29. What is ‘Monopolistic Competition’?30. What do managers of companies/competitors in ‘Monopolistic Competition’ need to do & develop to survive/stay in business and grow the business?

Dr. Smita · Accepted Answer

Chapter-7
1. Yes, it is illegal to indulge in price-fixing acts and influencing the market supply collectively.
2. No, in case the market is dealing with homogeneous or similar products businesses cannot charge higher prices than others. This is because they cannot attract the customers towards them as they could if they are dealing with differentiated products.
3. The shutdown point is defined as the minimum point beyond which the firms decide to exit the market. In the case of perfectly competitive markets, the minimum point of short-run variable cost is the shutdown point. If the firm is unable to cover the variable cost in the short run, it decides to exit the market.
4. With this perfect market, the entire economy would benefit as the consumers will enjoy consumer surplus, producers will enjoy producer surplus, there would be no exploitation in the market and the entire economic set up would run in the most efficient manner.
5. Perfectly competitive markets are characterized by homogeneous products. All the consumers and producers are dealing in exactly the same product with no scope for differentiation. Hence, the initiative of creating, innovate, research and new product development are not present in these market structures.
6. The concept of a perfectly competitive market is too good to be true. A consumer would possess complete information about the market and they would not face any kind of exploitation from any of the sellers. But, the concept of perfectly competitive markets can exist in very few product categories like an agricultural and primary product that would not suffice the complete consumer demand.
7. The concept relates to Profit Maximization.
8. With the increase in the number of trucks in the industry, the profits of the firms got distributed and thus reduced. 
9. After a few of the firms start exiting the industry, the prices begin to rise and the remaining firms start earning better profits.
10. The trucking market is the perfect case of perfect competition. A single firm cannot influence the price and they are all providing similar services. With the entry of more and more firms, the profits of the firms’ declines and with the exit of a few of the firms from the industry, the profit of the remaining firm increases.
11. The business may gain competitive advantage by Merging with other competitors, differentiating products, and making trade associations with other producers to influence the consumer taste,

QUIZ 4 ECON 550 MBA page 1 of 3 Chapters 7 + 8 30 questions Chapter 7 1. Is it legal in the United States for companies and businesses of similar product to get together and as a group determine...

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