In 2006, the five leading suppliers of digital cameras in the United States were: Canon, Sony, Kodak, Olympus, and Samsung. The combined market share of these five firms was 60.9 percent. The leading firm was Canon, with a market share of 18.7 percent. The own price elasticity for Canon’s cameras was -4.0 and the market elasticity of demand was −1.6. Suppose that in 2006, the average retail price of a Canon digital camera was $240, and that Canon’s marginal cost was $180 per camera. 

Discuss industry concentration, demand and market conditions, and the pricing behavior of Canon in 2006. Do you think the digital camera industry environment is significantly different today? Explain.

Answer rating: 100% (QA)

In 2006 the digital camera industry in the United States was moderately concentrated with the five l... View the full answer