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Economics for Today 9th Edition by Irvin Tucker
Edition 9ISBN: 978-1305507111Economics for Today 9th Edition by Irvin Tucker
Edition 9ISBN: 978-1305507111 Exercise 6
HOW OLIGOPOLISTS COMPETE AT THE FINAL FOUR
Applicable Concept: oligopoly
Suppose March Madness included your basketball team making it all the way to the Final Four and you were going to be there. Before leaving, you checked the official Web site and noticed a Coke ad giving a prize to the person who submitted the best video commercial for a new Coke product. But this was only the beginning of the Great Cola Wars. Shortly after leaving the plane at the airport, you encountered a group of students who were giving away huge inflatable plastic hands with index fingers sticking up in the air signaling that your team is number one. The plastic hands were imprinted with the Pepsi-Cola logo and your choice of a Final Four team. And the group was also giving away free ice-cold cans of Pepsi. As you walked along the streets to your hotel, giant inflatable "cans" of Pepsi appeared all over the downtown area on the sidewalks and on top of gas stations. And not to be outdone, the entire side of a prominent three-story building was painted Coca-Cola red and white with the 64 NCAA basketball finalists and all the winners listed bracket by bracket. Following the first-round games, painters were on scaffolding three stories up filling in the Coke sign's brackets for the final two teams, in school colors no less. Inside the arena, the colas continued their battle by scrolling cola ads with other ads under the press rows along either side of the basketball court. This was indeed competition between showboating industry giants worthy of the Final Four competition among the basketball teams.
Many fascinating markets function during the Final Four basketball tournament, including competitive markets that determine prices for parking lots, restaurants, and tickets. (Recall the Checkpoint in Chapter 4 on ticket scalping.) Then there were the hotels surrounding the arena, which joined a centralized booking service. Each hotel had raised its normal price by 75 percent for the weekend.
In this feature, two forms of oligopoly were observed. Identify each of these forms and explain why it is being used by the oligopolists.
Applicable Concept: oligopoly
Suppose March Madness included your basketball team making it all the way to the Final Four and you were going to be there. Before leaving, you checked the official Web site and noticed a Coke ad giving a prize to the person who submitted the best video commercial for a new Coke product. But this was only the beginning of the Great Cola Wars. Shortly after leaving the plane at the airport, you encountered a group of students who were giving away huge inflatable plastic hands with index fingers sticking up in the air signaling that your team is number one. The plastic hands were imprinted with the Pepsi-Cola logo and your choice of a Final Four team. And the group was also giving away free ice-cold cans of Pepsi. As you walked along the streets to your hotel, giant inflatable "cans" of Pepsi appeared all over the downtown area on the sidewalks and on top of gas stations. And not to be outdone, the entire side of a prominent three-story building was painted Coca-Cola red and white with the 64 NCAA basketball finalists and all the winners listed bracket by bracket. Following the first-round games, painters were on scaffolding three stories up filling in the Coke sign's brackets for the final two teams, in school colors no less. Inside the arena, the colas continued their battle by scrolling cola ads with other ads under the press rows along either side of the basketball court. This was indeed competition between showboating industry giants worthy of the Final Four competition among the basketball teams.
Many fascinating markets function during the Final Four basketball tournament, including competitive markets that determine prices for parking lots, restaurants, and tickets. (Recall the Checkpoint in Chapter 4 on ticket scalping.) Then there were the hotels surrounding the arena, which joined a centralized booking service. Each hotel had raised its normal price by 75 percent for the weekend.
In this feature, two forms of oligopoly were observed. Identify each of these forms and explain why it is being used by the oligopolists.
Explanation
Verified
Verified
We can easily observe that the Coke and ...
Economics for Today 9th Edition by Irvin Tucker
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