Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 2

You manage a company that competes in an industry that is comprised of five equal-sized firms. A recent industry report indicates that a tariff on foreign imports would boost industry profits by $30 million-and that it would only take $5 million in expenditures on (legal) lobbying activities to induce Congress to implement such a tariff. Discuss your strategy for improving your company's profits.