COMM 394 Lecture Notes - Price Discrimination, Resale Price Maintenance, Bid Rigging
Document Summary
Market failure 6 investigations: mergers and abuse of dominant position, conspiracy to lessen competition, predatory pricing, price discrimination, resale price maintenance and refusal to deal, misleading advertising and deceptive marketing practices. Economies of scale the cost advantage that arises with increased output of a product. Economies of scope average total cost of production decreases as a result of increasing the number of different goods produced. Mergers are subject to review by commissioner of competition (cid:0) must be notified of all mergers that exceed certain size thresholds prior to competition. Merger occurring between companies in the same industry (common in industries with fewer firms, market share gain is much greater) Concentration ratio rule top 4 firm > any other competitors (cid:0) should not be allowed. Merger occurring between two companies producing different goods or services for one specific finished product. Two or more firms operating at different levels within an industry"s supply chain merge operations.
