1. In your opinion, how does NIKE acquire market power? What impact do barriers
ID: 1177176 • Letter: 1
Question
1. In your opinion, how does NIKE acquire market power? What impact do barriers to entry have on NIKE's market power?
2. Are U.S. Antitrust Laws applicable to the fashion industry? A good answer to this question would start by explaining the objective of U.S. Antitrust Laws.
3. Under what circumstances might consumers be better off with monopoly or oligopoly than with a competitive industry structure?
4. Explain how the free-rider problem leads to market failure.
6. In order to avoid price competition, how do oligopolists cooperate? Can oligopolist use nonprice competition strategies - are there advantages for using nonprice tactics? Give an example.
7. What is market failure and what are the sources of this problem?
8. How can fines and subsidies be used to correct market failure?
notes: basic industry structure: pure competition, monopolistic competition, oligopoly, and .monopoly (or pure monopoly). market failure - when a market economy is producing less/more than what is socially optimal. externalities are, how market failure could be resolved, and U.S. antitrust laws - laws that ensure competition in the market.
Explanation / Answer
1] http://www.slideshare.net/PareshAshara/nike-12906460
this would get all you want to know
2]U.S. Antitrust Laws applicable however Democrats choose to apply them.
If you sell below your industry's average price and are not a large Democrat donor, you ARE GUILTY of predatory pricing.
If you sell above your industry's average price and are not a large Democrat donor, you ARE GUILTY of price gouging.
If you sell at your industry's average price and are not a large Democrat donor, you ARE GUILTY of price fixing.
3]None! When AT&T and T-Mobile tried to merge, when taken to court on this, they were denied the merger due to the fact that it would create a sort of monopoly on the cell phone market. Basically, they would control the prices (they could offer the best range of service around at whatever prices they wanted, low or high) and get away with it because no one could really compete, other companies being so much smaller and having less advantages. Eventually, this "monopoly" of a lesser sort could have caused other phone companies to go out of business, being unable to compete in the market.
4] If those who benefit from a public good are asked to contribute an amount reflecting their valuations, an individual may decide to free ride on the payments of others. Because of the free-rider problem, public provision may be warranted. This, however, does not resolve the problem of determining the public's aggregate valuation of the good and thus whether it should be supplied. If individuals could be excluded from consuming the public good the revelation and free-rider problem could be resolved - at least in principle. For example, not allowing satellite-dish ownership free reception of cable television induces customers to pay for the service.
5]
Structural Determinants of Competition
Threat of Entry
Properties of Entry Barriers
Rivalry Between Existing Competitors
Shifting Rivalry
Pressure from Substitute Products
Bargaining Power of Buyers
Bargaining Power of Suppliers
Altering Buying Power
Structural Analysis and Competitive Strategy
Structural Analysis and Diversification
6] http://www.economicsonline.co.uk/Business_economics/Oligopoly.html
7]Market failure is a concept within economic theory describing when the allocation of goods and services by a free market is not efficient. That is, there exists another conceivable outcome where a market participant may be made better-off without making someone else worse-off. (The outcome is not Pareto optimal.) Market failures can be viewed as scenarios where individuals' pursuit of pure self-interest leads to results that are not efficient %u2013 that can be improved upon from the societal point-of-view.[1][2] The first known use of the term by economists was in 1958,[3] but the concept has been traced back to the Victorian philosopher Henry Sidgwick
8] apparently, "market failure" must mean that the free market fails to provide what some meddling politician thinks it should provide.
from this context, i would say that:
FINES are used to punish businesses for producing goods and services that the meddling politician thinks should not be produced.
SUBSIDIES (government funds given to businesses) are used to make it cheaper to produce things that are considered desirable.
bear in mind that this is a keynesian concept.
followers of john maynard keynes believe that government should take an activist role in business, by manipulating the business climate to achieve desired outcomes.
advocates of a truly free market (libertarians) believe that consumers and producers can make up their own minds without government interference. so, from a free market standpoint, there is no such thing as a "market failure." (if the demand is there, someone will fill it, at a reasonable cost.)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.