please indicate whether you agree with the following statements in italics, and
ID: 1242103 • Letter: P
Question
please indicate whether you agree with the following statements in italics, and explain your answer: (a) Parallel shifts in the demand function can be used to identify the degree of market power being exercised in a market. (B) Suppose that most of the city's consumption of a good is supplied by production within the city, and that most local production is sold to local consumers. We can conclude that this city is a geographic antitrust market for the good in question (c) Contracts between a firm and its customers can be used to facilitate collusion (d) Suppose that in a particular country, price fixing is not subject to criminal law; instead, if a cartel is caught, they are simply forced to dissolve the cartel and return to non-cooperative behavior. Such a policy cannot deter collusion because it does not involve a penalty (fines or imprisonment) for the cartel membersExplanation / Answer
(a) Parallel shifts in the demand function can be used to identify the degree of market power being exercised in a market.
Agree since it will reinforce the demand of the supplied product
(B) Suppose that most of the city's consumption of a good is supplied by production within the city, and that most local production is sold to local consumers. We can conclude that this city is a geographic antitrust market for the good in question
Disagree becasue it does not matter as simple as that
(c) Contracts between a firm and its customers can be used to facilitate collusion
Disagree becasue its not possible to create collusion by merely using contracts .You need evidence of any bankruptcy from the contrctor side
(d) Suppose that in a particular country, price fixing is not subject to criminal law; instead, if a cartel is caught, they are simply forced to dissolve the cartel and return to non-cooperative behavior. Such a policy cannot deter collusion because it does not involve a penalty (fines or imprisonment) for the cartel members
Agree becasue its just a warning anf cartel members might be forced to abide by the Law
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