Business and Management
Submitted By TropicalPara
Principles of Economics: Chapter 13 1. A merger is the combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock.
Acquisition: An asset or object bought or obtained, typically by a library or museum.
3. A concentration ratio is a measure of the total output produced in an industry by a given number of firms in the industry. The most common concentration ratios are the CR4 and the CR8, which means the market share of the four and the eight largest firms. Each measure means something different for the competition. The lower measures vary in competition compared to the higher measures.
5. It can be difficult to measure the competition generated by some markets due to the lack of information. We must consider that some markets are extremely unknown and the competition isn’t blatantly obvious for the market at stake.
7. In competition law, exclusive dealing refers to an arrangement whereby a retailer or wholesaler is 'tied' to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area.
9. Predatory pricing is the act of setting prices low in an attempt to eliminate the competition. Predatory pricing is illegal under anti-trust laws, as it makes markets more vulnerable to a monopoly causing all competition to fall off.
11. Although public utilities are a natural monopoly, splitting them up into a number of separate competition firms would completely take the monopoly concept away and form thoughts of predatory pricing in order to reduce competition.
13. A price cap regulation is a form of economic regulation generally specific to the utility industry. Price cap regulation sets a cap on the price that the utility provider can charge.