CST620 Economic Application Assignment

Added on - 28 May 2020

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Running head: ECONOMIC APPLICATIONEconomic applicationName of the studentName of the universityAuthor note
1ECONOMIC APPLICATIONActivity: 2Question: 1In the current business scenario, there are various strategies being initiated by thebusiness organizations in order to generate more revenue from the market. However, some ofthem are unethical in nature. One of the key practices being initiated by the businessorganizations is the initiation of the collusion1. It refers to the unethical cooperation andunderstanding among the business organizations to operate in the market. With the initiation ofthe collusion, business organizations form cartels among them in order to collectively determinethe market price and to cut off the impact of the competition. Thus, when the price is beingdetermined by the cartels, customers are forced to buy products by that.In the majority of cases, collusion occurs in the oligopoly market with having few playersin the market. In the case of the oligopoly market, few players in the similar product categoryoperate in the market and thus, it becomes easy and beneficial for them to come to anunderstanding among themselves2. Collusion is being promoted by the organizations in order tocut off the elastic nature of their products.Question: 2In the given table, it is being seen that, revenue, profit and profit per share have increasedtill 2010. Thus, it can be concluded that, price fixing is having positive impact on their financialperformance3. The growth rate of Procter & Gamble is rapid and the given table shows that,1Green, Edward J., Robert C. Marshall, and Leslie M. Marx. "Tacit collusion in oligopoly."The Oxford Handbookof International Antitrust Economics2 (2014): 464-497.2Potters, Jan, and Sigrid Suetens. "Oligopoly experiments in the current millennium."Journal of EconomicSurveys27.3 (2013): 439-460.3Normann, Hans-Theo, and Elaine S. Tan. "Effects of different cartel policies: evidence from the German power-cable industry."Industrial and Corporate Change23.4 (2013): 1037-1057.
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