Questions tagged [competition]
The competition tag has no usage guidance.
77
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1answer
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Measuring effects of degree of (buyer) competition on price: references
I would like to examine the effect of degree of competition (market power?) among buyers on price of a product. I have data on product price, number of buyers with nonzero purchases and a couple more ...
1
vote
2answers
92 views
How does a CLEC innovate?
A CLEC, competitive local exchange carrier, is described...
A competitive local exchange carrier (CLEC), in the United States and
Canada, is a telecommunications provider company (sometimes called a
&...
1
vote
1answer
40 views
The Dumping Argument and Trusts
I have often heard the following argument against the antimonopoly/anticollusion law:
Whenever the entrepreneurs decide to enter into "illegal" collaboration, each one has an opportunity to ...
3
votes
4answers
179 views
Why have so many legitimate smaller biotechs sprung up and thrived?
I stumbled this question on r/AskScienceDiscussion, but I'd like to ask it from a microeconomics or competition standpoint.
Why can't Big Pharma accomplish what legitimate small biotechs have? ...
0
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0answers
32 views
Find out inverse demand curve in Cournot competition
I am currently struggling with an exercise and I hope you can help me.
These are the basic information:
The inverse demand curve is P=a-bQ, while there are four firms competing (Cournot) in this ...
2
votes
1answer
27 views
Does the theory of contestable markets apply to industries where there is a natural monopoly?
The theory contestable markets requires that there be no barriers to entry, no sunk costs, and access to the same level of technology. I know common industries that have natural monopolies (like ...
6
votes
1answer
92 views
Has it truly been established that the restaurant industry operates on thin margins?
For as long as I can remember I've constantly seen the truism that restaurants operate on "razor sharp margins" repeated endlessly by the media, the restaurant industry, and the average joe. This ...
0
votes
1answer
29 views
Why is the equilibrium network size can be less than the socially optimal size in networks w/ positive externalities for single system?
For Context, I am reading http://web.mit.edu/rpindyck/www/Courses/NetEx19.pdf. The chapter talks about network externalities in single system like fax machine, email, vaccinations for measles. ...
1
vote
1answer
74 views
Prices set by firms are the same in a Salop circle. But why?
Trying to calculate the prices charged by each firm, I don't understand why the solution argues that all firms set the same price. If I use the assumption that they are the same, I can figure out the ...
0
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0answers
21 views
Military and Business Strategy
I am thinking through the parallels between military and business strategy but am stuck on a foundational aspect. Most of business strategy results from some kind of competition in order to gain ...
3
votes
2answers
95 views
What are possible solutions when promoting competition is not applicable?
Usually, more competition means lower prices and higher quality as less effective businesses go out of business. However, it appears that it's not always the case. When there're a lot of health ...
0
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0answers
43 views
Pricing Strategy for Product that Ships Across a Country
Not sure if this is the right place for this question.
Assume I produce a grocery item that I want to sell across the country. If I sell my product to a grocery nearby, my shipping cost will be less ...
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0answers
23 views
Is there evidence that non-profits might have a tax or other competitive advantage in competing with for-profit corporations?
Lets say my non-profit's interest is to diminish co2 emissions in the city.
Are there useful forms of putting that tax money for better use and gaining competitive advantage against other for-profit ...
2
votes
1answer
279 views
Competitive vs complete and non-competitive vs incomplete marekts
The very insightful questions that arise, when someone studies micro foundation are the following: What is the difference between competitive and complete marekts? When we refer to the first is it ...
7
votes
4answers
5k views
Do companies have non compete agreements between each other?
Do companies also know for a better lack of words armistice? When searching for non compete agreements everything that comes up are agreements between companies and employees, but do whole companies ...
0
votes
1answer
36 views
Emergence of notion “primitive business” in the era of Industry 4.0 and globalization
It has always been the conventional wisdom that businesses should be fit to survive in the market competition, that only the best businesses can survive beyond horizon of several years, that survival ...
3
votes
1answer
47 views
Why do some perfectly competitive, loss-making firms shutdown and others don't?
Question:
Why do perfectly competitive, loss-making firms that have (AC>AVC>AR) shutdown but
Firms that have (AC>AR>AVC) not shutdown?
-Both of these types of firms are making a loss. How is it ...
4
votes
0answers
53 views
Examples of Analysis of Competition in a Latent Product Characteristic Space
Competition between firms offering heterogenous products is often an exercise of constructing the right kind of spatial model.
There is the famous Hotelling model and many other papers that model ...
5
votes
1answer
70 views
Intermediate Case of Bertrand and Cournot
I am wondering whether there is a model of oligopolies in which we have some intermediate case of Bertrand and Cournot competition. What I do not mean by "intermediate" is the mixed Bertrand - Cournot ...
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0answers
55 views
Cournot competition subgame perfect Nash equilibrium with two products
QUESTION:
Assume there are two types of products, labelled $l$ and $n$. Firms compete in the market by choosing which product to sell and then choosing the quantities. Let $Q_n$ and $Q_l$ denote the ...
0
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1answer
41 views
cournot competition with strategic consumers
I am not familiar with economics but does anybody know any reference about cournot competition with strategic consumers?
In other words, is there any known competition where both producer and ...
2
votes
0answers
40 views
Can State Owned Enterprises compete with each other without a private enterprise in a market? Examples
In a domestic market, there exist multiple (around 5) multi-product state-owned enterprises. In a few products, SOEs compete with private enterprises while in the majority of products, the SOEs share ...
3
votes
0answers
21 views
Are modern conglomerate mergers better or worse for economic competition?
Modern conglomerate mergers differ from those from decades ago as, even though they takeover smaller companies, they have a more narrow focus on related business and, in order to be successful, have ...
4
votes
2answers
599 views
What would you call a real market that is close to perfect competition?
I want to explain perfect competition to students using a few practical examples without going into much of the theory. But I want it to be theoretically accurate and I don't want to claim that those ...
1
vote
1answer
60 views
Is this market monopoly or duopoly?
Could you help me to identify monopoly, because I got confused. There is a company with market share of 54 %. The second one has market share of 21 %.
Can this market be characterized as monopoly or ...
0
votes
2answers
265 views
In perfect competition, why is there economic loss if marginal cost > marginal revenue?
Here's a graph for reference:
In the left graph, I read from a book (CFA L1 notes) that
At any output above the quantity where $MR = MC$, the firm will be generating losses on its marginal ...
2
votes
1answer
393 views
How can perfectly competitive firms earn zero profits?
Consider a firm that chooses the quantity of labour $L$ to hire which maximises its profits. As usual, we suppose that output $Y$ is increasing in $L$ but at a strictly decreasing rate; and for ...
1
vote
3answers
238 views
Do price controls increase competition?
Question: Is there any way to show that price controls might increase competition?
I'm trying to find a way, any way, that price controls might lead to an increase in competition between companies. I'...
1
vote
0answers
637 views
Will the market for driverless cars move toward a monopoly?
There is a short article in The Economist (link below) where the writer makes the claim that because there are firms the exhibit economies of scale - in driverless technology - they will eventually ...
1
vote
1answer
257 views
Algebraic demand curve in a perfectly competitive market for a firm
I've had a few years of economics courses already but still there are some basic things in the field that I just can not wrap my head around... (let's say economics is not my favorite field of study)
...
2
votes
1answer
71 views
Mathemtical Economics Question regarding Profit Maximization
I'm studying Mathematical Economics and there's this question that I'm unable to understand.
Q. Suppose a firm faces a demand curve for its product $P = 32 - 2Q$, and the firm's costs of production ...
9
votes
1answer
89 views
Competition and welfare - empirical evidence
Consider the following claims:
less competitive markets deliver worse outcomes for consumers,
less competitive markets deliver lower social welfare,
less competitive markets deliver higher prices/...
3
votes
1answer
1k views
Why bankrupt firms continue to operate?
Many firms in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down?
Well, obviously there's a reason behind ...
0
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1answer
86 views
When big companies invest on a new idea/product?
I am graduated in AI field. I love robotics and intelligent systems, so I worked on some new products by myself at home that have new ideas and are interesting(at least me and my friends think!). I ...
0
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2answers
78 views
Why exactly does a perfectly competitive market depend on consumers having perfect information about a product?
My book states that one factor defining a perfectly competitive market is its participants having full information about prices and product characteristics. I can understand how having perfect ...
0
votes
1answer
2k views
Why would a natural monopoly lose money when MC=P, but a competitive firm would get positive accounting profit?
I assume that the natural monopoly is required by law to have maximum price=MC. According to this video such regulation would require constant subsidies for monopoly, because otherwise it would go ...
0
votes
1answer
38 views
What does pilot price mean in the context of marketing?
In my lecture slide, it is said to be one of the competition-based price determination.
When I searched online, I was unable to find anything relevant.
0
votes
1answer
64 views
Which is the origin of the “economic” approach to production?
Economic theory states that under competitive markets, economic profits are zero (even though accounting profits are not zero). What is the origin of this analysis? Who was the first author to write ...
3
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1answer
45 views
Interpreting wedge between MP and wage
I am an econ master student and I need a bit of help understanding an issue, for my thesis. I have two related questions.
Assume a firm producing a good with labor and capital, $Y=F(L,\bar K)$. ...
6
votes
2answers
865 views
In microeconomics : is this the contradiction in the atomicity of firms ?
Let $p$ be the market demand. It is a function of the market production $Q$. Let $q_i$ be the production of firm $i$.
Reading Steve Keen (in Debunking Economics, chapter II) quoting George Stigler, I ...
4
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1answer
1k views
Hayek's defense of competition regulation
This article claims Hayek endorsed competition regulation:
As it evolved, neoliberalism became more strident. Hayekās view that governments should regulate competition to prevent monopolies from ...
2
votes
3answers
382 views
Why does competition work for capitalism?
As far as I know, capitalism is based on competition:
If two(or more) companies produce similar products that compete against other, these companies are in a competition.
Because the objective of a ...
-1
votes
1answer
662 views
Monopoly and competitive output levels
Why do markets that are dominated by a single seller have a tendency to maximize profits at lower levels of output than their competitive counterpart? Why is the competitive market equilibrium price ...
2
votes
1answer
309 views
Non-constant returns to scale and competitive factor markets
I am having difficulties to understand the conclusion in bold below, taken from Frankel (1962):
A second limitation of the Cobb-Douglas function appears when it is fitted to historical ...
5
votes
6answers
12k views
What is the difference between a free market and a perfectly competitive market?
I am trying to find the distinction between a free market and a perfectly competitive market, and I can't find the right definition on what makes them different. Can someone give me a clearly ...
3
votes
2answers
211 views
Adam Smith and wage gap?
Recently I was reading up on Adam Smith's economic philosophy of competition (i.e self interest) and division of labor.
While I understand (and agree) with Smith's commentary that free markets and ...
1
vote
1answer
2k views
How do we find a competitive equilibrium price when 2 firms operate with different marginal costs?
Consider a homogenous goods market with the demand
function Q = 30 ā P, where Q and P denote quantity and price respectively.
There are two firms playing a price game in the following manner: firm 1
...
4
votes
0answers
211 views
Why are inventions inevitably correlated with imperfect competition?
Romer (1990) elaborates the incompatibility of nonrival inputs with constant returns to scale: If a production function depends on rival and nonrival inputs and both inputs are productive, then the ...
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1answer
92 views
Government Ownership vs Private Ownership
In a debate concerning long term economic strategy, a representative of a left party was trying to support that privatisation and Small Government which minimizes its own activities is not a viable ...
3
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2answers
2k views
Are market structures on a spectrum?
So I understand that each market structure has their own characteristics, and that for instance Perfect Competition involves high competition, and I believe Monopolistic competition slightly less so, ...
