Problem Set Three: 1. SYNU is a monopolist in beer production and distribution in the imaginary...

Transcribed Image Text:

Problem Set Three: 1. SYNU is a monopolist in beer production and distribution in the imaginary economy of Hope. Suppose that SYNU cannot price discriminate; that is, it sells its beer at the same price per can to all customers. On graph (B), SYNU's cost has reduced due to its new technology in production. Indicate the profit-maximizing price and quantity for SYNU. Color green for area represents its profit if SYNU is making a profit, and color red for the area represents its loss, if SYNU is suffering a loss. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market. PRICE AND COST (Dollars per can) 4.00 3.50 3.00 2.50 2.00 ATC PRICE AND COST (Dollars per unit) 4.00 3.50 3.00 2.50 2.00 X X 1.50 1.00 0.50 MC 1.50 1.00 ATC 0.50 MC D MR D MR 0 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 QUANTITY (Thousands of cans of beer) QUANTITY (Thousands of cans of beer) (A) (B) 2. Categorize each of the following examples as a horizontal, vertical, or conglomerate merger. Scenarios Tobacco company merged with a company that primarily sells dairy foods. A newspaper publisher merges with a paper and pulp mill. Two large oil companies merged to form a single company. Type of merger Problem Set Three: 1. SYNU is a monopolist in beer production and distribution in the imaginary economy of Hope. Suppose that SYNU cannot price discriminate; that is, it sells its beer at the same price per can to all customers. On graph (B), SYNU's cost has reduced due to its new technology in production. Indicate the profit-maximizing price and quantity for SYNU. Color green for area represents its profit if SYNU is making a profit, and color red for the area represents its loss, if SYNU is suffering a loss. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market. PRICE AND COST (Dollars per can) 4.00 3.50 3.00 2.50 2.00 ATC PRICE AND COST (Dollars per unit) 4.00 3.50 3.00 2.50 2.00 X X 1.50 1.00 0.50 MC 1.50 1.00 ATC 0.50 MC D MR D MR 0 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 QUANTITY (Thousands of cans of beer) QUANTITY (Thousands of cans of beer) (A) (B) 2. Categorize each of the following examples as a horizontal, vertical, or conglomerate merger. Scenarios Tobacco company merged with a company that primarily sells dairy foods. A newspaper publisher merges with a paper and pulp mill. Two large oil companies merged to form a single company. Type of merger