ECON 250D1 Study Guide - Final Guide: Marginal Cost, Computer Hardware, Natural Monopoly
Document Summary
Econ208: prof. dickinson: conference question sheet 8 answer guide. One important factor that the canadian competition bureau must consider when assessing the likely effects of a merger is the definition of the market. How is geography likely to affect the definition of the market for the following products: fresh-baked breads and cakes, cement, gold jewellery, computer hardware. This question asks you to think about what constitutes the market, especially when considering competition policy. Geography is important in conjunction with the attributes of the product, especially transportation costs: in the case of baked goods, transportation costs (relative to the value of the good itself) are quite high. And the fact that it hardens and becomes useless after some time gives it an element of, perishability. Again, this combination suggests a relatively small geographic market: in the case of gold jewellery, the transportation costs (relative to the value of the product) are very low.
