MBA502 Economic Theory and Applications: Chapter 8 Applicable Questions (Pg: 220):
1) Find and label the monopolist’s profit-maximizing output and price:
The chart shown below represents monopolistic competition, short run.
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d) If marginal cost and marginal revenue are equal, profit does not change.
e) Finally, the level of production that equates marginal revenue and marginal cost is profit maximization (Amosweb.com, 2013).
2) Beer Industry Takeover Attempt 2008 Case Study
a) The factors leading the takeover merger in the beer industry include increasing market share and annual sales due to the fact that In Bev’s leading competitor Anheuser-Busch controlled nearly half of the U.S. Beer market and was one of the top three largest brewers in the world by volume in 2008. Other factors include industry trends towards consolidation because of increasing expenses for commodities, and balancing slow growth in mature markets with rapid growth in emerging markets. Also, specifically acquiring Anheuser-Busch suited InBev’s budget for cost saving opportunities as well as the fact that the companies have little geographic overlap and could gain stronger position in China since both currently had China expansion projects in process.
b) Factors such as the U.S. Public might create problems for the merger as the American public considers Budweiser a symbol of national sovereignty and have...