1. Read the article, "Qualcomm Faces EU Probe Over Alleged 'Predatory' Pricing," in the Learning Resources before beginning this question. The European Union Competition Chief said, "We are launching these investigations because we want to be sure that high-tech suppliers can compete on the merits of their products." Qualcomm responded that the claims were "without merit." On similar grounds, Qualcomm was fined in China for a bit below one billion dollars. Hint: To answer the following questions, you may consider Microeconomics textbook by Michael Parkin 12th: pages 234, 235, 325, and 355.
   • Qualcomm is a US company. Hence, why do the Europeans and China want to fine Qualcomm? Should US companies be under the umbrella of US authorities? Why or why not?
   • In probing for predatory pricing, should we consider the ATC or the MC? To be sure, how would you define predatory pricing?
   • In most places, in the market for baseband processors Qualcomm's market share is about two thirds. Does this mean that Qualcomm could charge arbitrarily high prices? Hint: See game on page 355 of the textbook.
   • Should predatory prices be allowed as consumers benefit from the low prices? Hint: Even if this is true, there could be disputes between domestic firms and foreign firms.

• article: "Qualcomm Faces EU Probe Over Alleged 'Predatory' Pricing, :
  • https://www.reuters.com/article/eu-antitrust-qualcomm-idUSL2N0ZW0FX20150716