Case Study 2 Jason Jerew PEST Analysis Political: Most significance troubles for De Beers are due to government consequences in the United States due to diamond warfare in West Africa‚ diamonds are commencing to run by the destroyed areas of Republic of Sierra Leone as well as Republic of Angola‚ along with in Soviet Russia‚ mines are comprising controlled topically as contrary to together with De Beers. Economic: With a possible increase in diamond gross sales anticipated in the United
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The Ohio school milk case Table of contents 1. Introduction.............................................................................................. 3 2. Market characterization............................................................................. 4 2.1. Definition of a free competitive market................................................ 4 2.2. Definition of a collusive oligopolistic market....................................... 4 2.3. Description of the Ohio school
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New York: Palgrave. Shy‚ O.‚ (1995)‚ Industrial Organization: Theory and Applications. London: MIT Press. The Office of Fair Trading (2003) Hasbro UK Ltd/Argos Ltd/Littlewoods Ltd. Available at: http://www.oft.gov.uk/OFTwork/competition-act-and-cartels/ca98/decisions/argos#.UVWsSr_ePzI The Office of Fair Trading (2003) Hasbro UK Ltd/Argos Ltd/Littlewoods Ltd Toy Industries of Europe (2003) TIE Facts and Figures 2003. Available at: http://www.tietoy.org/publications/ Treanor‚ J.‚ (2004) Monopoly:
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LESSON 6: COMPETITION LAW. UNFAIR COMPETITION The primary purpose of competition law is to remedy some of the situations in which the free market system breaks down. The invisible hand that Adam Smith identified in 1776 ensures in most situations that the free market economies left to their own devices will produce results more beneficial tan ban be realized by intervening in the market . The process of competition is seen as being of value and meriting protection. Protection is needed when undertakings
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Dr. David J. St. Clair Managerial Economics and Business Strategy 3551 #6 Answers – Summer 2012 1. What type of evidence did Dupont introduce in its plastic wrap trial that proved decisive in its acquittal? __ It brought in cross elasticities to show that there were many substitutes for plastic wrap. It then argued that the market had to be defined to include all substitutes. This broadened the definition of the market to the point where DuPont’s market share
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Entry barriers Market commonality with rivals Product homogeneity Industry-based Considerations Concentration • Combined percentage of sales from top 4‚ 8 or more firms. • Easy to organize collusion; but‚ can lead to duopoly‚ oligopoly‚ cartels and could face antitrust laws. • Colluding firms force customers to pay more. Ex: Banana comes to U.S from 3 companies—Dole‚ Del Monte‚ and Chiquita. • Firms avoid ‘tit-for-tat’‚ or industry goes downward spiral. • Many rivals: price competition
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models to describe oligopoly • Kinked demand curve • Duopoly : Cournot‚ Stakleberg‚ Bertrand • Price leadership (II) STRATEGIC BEHAVIOR (1) Collusive agreements and Cartels Collusive agreements is defined as an agreement between two or more producers to restrict output in order to raise prices and profits Cartel is defined by a group of firms entering into this collusive agreement Example : OPEC Consists of: Algeria‚ Angola‚ Ecuador‚ Iran‚ Iraq‚ Kuwait‚ Libya‚ Nigeria‚ Qatar‚ Saudi
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Explicit Collusion: Also termed overt collusion‚ this occurs when two or more firms in the same industry formally agree to control the market. Examples: * De Beers is the example of explicit collusion. * The most recent example of a cartel was between Unilever and Procter & Gamble who were found guilty of price fixing washing powder in 8 European countries. The case that was conducted by the European Commission after a tip off from Germany Company‚ Henkel. The resulting penalty
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Chapter 27 Antitrust Law N.B.: TYPE indicates that a question is new‚ modified‚ or unchanged‚ as follows. N A question new to this edition of the Test Bank. + A question modified from the previous edition of the Test Bank. = A question included in the previous edition of the Test Bank. TRUE/FALSE QUESTIONS 1. The purpose of antitrust law is to reduce competition. ANSWER: F PAGES: Introduction TYPE: N BUSPROG: Analytic AICPA: BB-Legal 2. Any activity that substantially affects interstate
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18-2 (Key Question) Describe the major provisions of the Sherman and Clayton acts. What government entities are responsible for enforcing those laws? Are firms permitted to initiate antitrust suits on their own against other firms? Sherman Act: Section 1 prohibits conspiracies to restrain trade; Section 2 outlaws monopolization. Clayton Act (as amended by Celler-Kefauver Act of 1950): Section 2 outlaws price discrimination; Section 3 forbids tying contracts; Section 7 prohibits mergers
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