Chapter 10 Solutions to Monopolistic Competition

Chapter 10 Prices, Output, and Strategy: Pure and Monopolistic Competition Solutions to Exercises 1. Pepsi and Coca-Cola bottlers salute enormous supplier position from the syrup manufacturers, sell primarily to gruelling securities industry store chains, and are constantly presented with many substitute firms who could contribute their role in the value chain. Thus, despite high barriers to presentation from high crown requirements, high switching costs, and closed statistical distribution channels, their sustainable profitability is first baseer than Coca-Cola and Pepsi. The latter face around no supplier power, few close substitutes as comprehend by loyal customers, very high barriers to effective approach, low intensity of rivalry from concentrated markets, non- terms tactics, and low cost-fixity with fast evolution involve especially overseas. 2. MTV operates in a highly concentrated near-monopoly market where fixed costs are low and indeed intensity of rivalry is reduced. MTV also faces little supplier power from numerous nonunique musical groups. The networks, in contrast, face the much great supplier power of the NFL, NBA and Professional Baseball. MTV has few substitutes whereas the networks now face 150 channels of substitutes for each type of programming. 3.

Reduced capital requirements and diminished scale economies will increase the threat of entry and reduce the sustainable industry profitability. 4. By increasing the demand for corn, the price of corn could be expected to rise in the short run. As corn becomes relatively more big-ticket(prenominal) as a feed grain, wheat and soybeans would be in more demand for feed grain purposes, also resulting in some price increases for these commodities. In the long run, given that at that place is excess productive agricultural capacity in the U.S., the price effects could be wiped out by supply increases. This variation is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed... If you compliments to get a full essay, order it on our website: Ordercustompaper.com

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