According to the news reported by Taiwan News on 8 Mar 2017, entitled Chunghwa Telecom, Taiwan...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
According to the news reported by Taiwan News on 8 Mar 2017, entitled "Chunghwa Telecom, Taiwan Mobile warned of violating fair trade laws as price war continues" as below (Chunghwa Telecom and Taiwan Mobile are two big telecommunication companies in Taiwan) TAIPEI (Taiwan News) -- Fair Trade Commission (FTC) Chairwoman Huang Mei-ying warned Chunghwa Telecom (CHT) and Taiwan Mobile Co. (TMC) that they both may be in violation of fair trade laws if they collude to withdraw from the low-cost 4G mobile market...... Both companies had promised to phase out their least expensive 4G plans at the end of February but instead extended the promotions. If the companies agree, as media rumors have suggested, to exit from the low-cost plans simultaneously, they would be in violation of fair trade laws and may face penalties..... The top three telecoms in Taiwan launched flat-rate 4G plans three years ago but have been unable to phase out the plans due to competition. ....(omitted) The news reported that the local govemment is afraid of big companies' collusion to charge a high price for their products. Therefore, the government wamed the telecommunication companies do not try to cellade with each other for charging 4G network high prices. Otherwise, the companies will be punished by the government if they collude. However, will the telecommunication companies collude? This question is going to deal with this question. There are 3 big telecommunication companies in Taiwan providing nearly the same 4G network services: Chunghwa Telecom (CHT), Taiwan Mobile (TMC), and Far EasTone Telecommunications (FET). For any telecommunication companies mentioned above, their goals are always to maximize your profits and attract as many users as you can. Suppose there are TWO different monthly charge schemes for any telecommunication companies: $399 and $599. a) What is the market structure in this question? Explain your answer briefly (3 points) b) Suppose you are the manager of CHT, will you charge $599 if your rivals are charging $399? Explain your answer briefly. (3 points) e) Suppose all the companies collude with each other and they charge the same price $599. Now, you are the manager of CHT, will you betray the other two companies by charging $399? Why or why not? Explain your answer briefly (4 points) d) According to your answers in parts (a) to (c), will the telecommunication companies collude to charge a high price? Explain your answer briefly (4 points) According to the news reported by Taiwan News on 8 Mar 2017, entitled "Chunghwa Telecom, Taiwan Mobile warned of violating fair trade laws as price war continues" as below (Chunghwa Telecom and Taiwan Mobile are two big telecommunication companies in Taiwan) TAIPEI (Taiwan News) -- Fair Trade Commission (FTC) Chairwoman Huang Mei-ying warned Chunghwa Telecom (CHT) and Taiwan Mobile Co. (TMC) that they both may be in violation of fair trade laws if they collude to withdraw from the low-cost 4G mobile market...... Both companies had promised to phase out their least expensive 4G plans at the end of February but instead extended the promotions. If the companies agree, as media rumors have suggested, to exit from the low-cost plans simultaneously, they would be in violation of fair trade laws and may face penalties..... The top three telecoms in Taiwan launched flat-rate 4G plans three years ago but have been unable to phase out the plans due to competition. ....(omitted) The news reported that the local govemment is afraid of big companies' collusion to charge a high price for their products. Therefore, the government wamed the telecommunication companies do not try to cellade with each other for charging 4G network high prices. Otherwise, the companies will be punished by the government if they collude. However, will the telecommunication companies collude? This question is going to deal with this question. There are 3 big telecommunication companies in Taiwan providing nearly the same 4G network services: Chunghwa Telecom (CHT), Taiwan Mobile (TMC), and Far EasTone Telecommunications (FET). For any telecommunication companies mentioned above, their goals are always to maximize your profits and attract as many users as you can. Suppose there are TWO different monthly charge schemes for any telecommunication companies: $399 and $599. a) What is the market structure in this question? Explain your answer briefly (3 points) b) Suppose you are the manager of CHT, will you charge $599 if your rivals are charging $399? Explain your answer briefly. (3 points) e) Suppose all the companies collude with each other and they charge the same price $599. Now, you are the manager of CHT, will you betray the other two companies by charging $399? Why or why not? Explain your answer briefly (4 points) d) According to your answers in parts (a) to (c), will the telecommunication companies collude to charge a high price? Explain your answer briefly (4 points)
Expert Answer:
Answer rating: 100% (QA)
a The market structure in this question is an oligopoly This is because there are only three major c... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
According to the News Generation, Inc. Web sites Radio Facts and Figures, which has as its source Arbitron Inc., the mean number of radios per U.S. household was 5.6 in 2008. A random sample of 45...
-
According to the News Wire "Manufacturing: Fewer Jobs, More Output," since 1975 in the manufacturing sector (a) Has output increased or decreased? (b) Has employment increased or decreased? (c) Has...
-
According to the News Wire "Market Shortage," (a) How large was the market shortage at the Church set price of $0? (b) If the Church had sold the tickets for $100, how would have quantity demanded...
-
Problem 9- 3A Estimating and reporting bad debts P2 At December 31, 2013, Hawke Company reports the following results for its calendar year. Cash sales . . . . . . . . . . $ 1,905,000 Credit sales ....
-
Find the trigonometric Fourier series coefficients for the waveform in figure. v(1) 0 1 2 3 4
-
A loaded railroad car of mass m is rolling at a constant velocity v0 when it couples with a massless bumper system. Determine the maximum deflection of the bumper assuming the two springs are (a) In...
-
You are considering the following two mutually exclusive projects. If the cost of capital for both projects is 7 percent, which statement concerning capital-budgeting rules listed will be correct in...
-
Sandy Kupchack just graduated from State University with a bachelors degree in history. During her four years at the U, Sandy accumulated $12,000 in student loans. She asks for your help in...
-
In which scatter plot is r = 0.3? (A) (D) The graph shows a scatter plot with a correlation coefficient of r = 0.3. (Type A, B, C, D, E, or F.) < Question 40 of 40 Next question (B) (E) This quiz: 40...
-
Proudfoot, Inc. would like to deduct expenditures for tangible personal property under $4,000 as maintenance and repairs costs. To implement this policy, which of the following is not required? a. A...
-
A hot unit testing topic is "code coverage." As mentioned in this week's class notes, code coverage is how much of your production code is actually being tested by unit tests. 100% coverage is where...
-
Review Constants Here is a simple example. The inhabitants of a small island begin exporting beautiful cloth made from a rare plant that grows only on their island. Seeing how popular the small...
-
Calculate the "activity variance" with respect to revenues. A company has the following information: Revenues - Planning Budget $50,000 Costs - Planning Budget $45,000 Revenues - Flexible Budget...
-
On December 31, 2023, Ainsworth, Incorporated had 600 million shares of common stock outstanding. Twenty million shares of 8%, $100 par value cumulative, nonconvertible preferred stock were sold on...
-
Hutchinson, Inc. provides the following data taken from its third quarter budget: Cash collections July $67,000 August $39,000 September $43,000 Cash payments: Purchases of direct materials 37,000...
-
A small object with a charge of q = 10.0 C travels from the origin to the point (x, y) = (20.0 cm, 50.0 cm) in the presence of a uniform electric field E = 2401 V/m. Determine the following. (a) the...
-
Please fill the table as shows , thank you . Prepare a bank reconciliation at July 31. (List items that increase balance as per bank & books first.) JASON'S LOGISTICS COMPANY Bank Reconciliation ...
-
Below is a sample of the data in the file NFLAttendance which contains the 32 teams in the National Football League, their conference affiliation, their division, and their average home attendance....
-
Refer to Problem 10. In problem In the Southern Ocean food web, the krill species Euphausia superba is the most important prey species for many marine predators, from seabirds to the largest whales....
-
Line A: y = 1.5 + 0.5x Line B: y = 1.125 + 0.375x a. Graph the linear equations and data points. b. Construct tables for x, y, Ëy, e, and e 2 similar to Table 4.4 on page 151. c. Determine which...
-
Refer to Exercise 10.114 and obtain a 98% confidence interval for the mean increase of the serum 25(OH)D concentration after 12 weeks of drinking fortified orange juice.
-
What will be the value of AHS' TIE during 2007? a. 2.75 b. 2.85 c. 2.95 d. 3.05 AHS INC. 2007 Income Statement (S in millions) Net sales S 9625 Cost of goods sold 5225 Depreciation 1890 Earnings...
-
What will be the appropriate value of AHS' inventory turnover ratio in 2007? a. 4.56 b. 4.78 c. 5.32 d. 5.90 AHS INC. 2007 Income Statement (S in millions) Net sales S 9625 Cost of goods sold 5225...
-
If a firm had a D/A ratio of 0.4, which of the following values would be equal to its D/E ratio? a. 4/10 b. 2/3 c. 0.4/1.4 d. 10/4
Study smarter with the SolutionInn App