Mr. Zuliani anticipates that prices will be lower given this change but needs your help determining what the equilibrium price is and what the expected profits (not including fixed costs) will be for the company. Zuliani Telecom analysts have estimated the yearly inverse market demand to be (quantities are in 000's): P = 140 – 0.02(Q1 + Q2) The estimated yearly costs for Zuliani Telecom to be: C1(Q1) = 26Q1 They estimated yearly costs for whoever their sole competitor (one of Telus, Bell, and Rogers) to be: C2(Q2) = 20Q2 Mr. Zuliani would love to be able to present to the board of directors the expected equilibrium price and expected yearly profits at the next board meeting coming up next week.
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- FIRSTRAND BANK, WESBANK AND TFS REFERRED TO COMPETITION TRIBUNALFOR COLLUSIONJOHANNESBURG - The Competition Commission said that it had referred FirstRand Bank, WesBank andToyota Financial Services (TFS) South Africa to the Competition Tribunal for collusion. An investigation by the commission has found that WesBank and TFS agreed to divide markets by allocatingcustomers or suppliers in the market for provision of vehicle finance, which is anti-competitive behaviour.The companies also agreed to stop WesBank from offering financing for some Toyota models for people whowanted to buy them from authorised Toyota dealerships. The actions above taken by the Competition Commission… a) …are an example of government failure aimed at ensuring market failure.b) …are an example of market failure aimed at ensuring an efficient allocation of resources.c) …are an example of government intervention aimed at an efficient allocation of resources.d) …are an example of government intervention aimed at…Cesar Rego Computers, a Mississippi chain of computerhardware and software retail outlets, supplies both educationaland commercial customers with memory and storagedevices. It currently faces the following ordering decision relatingto purchases of very high-density disks:D = 36,000 diskss = $25I = 20%Purchase price = $0.85Discount price = $0.82Quantity needed to qualify for the discount = 6,000 disksShould the discount be taken?ANSWER ALL QUESTIONS 1,2 and 3 Sainsbury's-ASDA merger blocked by the regulator (Competition and Markets Authority) (CMA) 1) Do you think the reasons for a merger between ASDA and Sainsbury mentioned in the news are justifiable? Why did the supermarkets want to merge? The deal would have created the UK's biggest supermarket chain, accounting for £1 in every £3 spent on groceries. Sainsbury's and Asda had said the planned tie-up would have cut their costs, allowing them to lower prices for consumers across the UK. Analysts also believed it was designed to help the two supermarkets counter the rise of discounters Aldi and Lidl in the increasingly competitive grocery market. 2) The CMA provides economic justifications to the merger block by regulators in the UK. Do you think the justifications are reasonable? Why was the CMA concerned? But the CMA, which had previously raised concerns about the deal, said the merger would lessen competition at both a national and local level. Sainsbury's…
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- (a) Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior to the merger, the market for four-wheel-drive tractors consisted of five firms. The market was highly concentrated, with a Herfindahl- Hirschman index of 2,765. Case's share of that market was 22 percent, while Fiat comprised just 12 percent of the market. If approved, by how much would the postmerger Herfindahl-Hirschman index increase?13. Gouge-em Cable Company is the only cable television and Internet service company licensed to operate in Backwater County. Most of its costs are access fees and maintenance expenses. These fixed costs total $6,400,000 monthly. The marginal cost of adding another subscriber to its system is constant at $20 per month. Gouge-em's demand curve can be determined from the data in the accompanying table. NUMBER OF SUBSCRIBERS Subscription Price (PER MONTH) $250 20,000 200 40,000 150 60,000 100 80,000 50 100,000 10 150,000Problem 07-16 (algo) Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior to the merger, the market for four-wheel-drive tractors consisted of five firms. The market was highly concentrated, with a Herfindahl-Hirschman index of 3,100. Case's share of that market was 20 percent, while Fiat comprised just 14 percent of the market. If approved, by how much would the postmerger Herfindahl-Hirschman index increase? Based only on this information, is the Justice Department likely to challenge the merger according to the Horizontal Merger Guidelines? No Yes O Possibly - but other factors will be considered