- Are Universities a cartel?
"How much do I hear for this student?" Time, April 16, 2001
A cartel is a market structure in which several competing firms agree to act as a single decision unit to establish pricing for maximum profit, i.e., a monopoly price, and every firm agrees to adhere to this price. The most well-known cartel is OPEC, the Organization of Petroleum Exporting Countries. more >>
- Cartel and cheating on production quotas: the case of OPEC (Organization of Petroleum Exporting Countries
"OPEC Talks Tough Again'", Time, March 22, 1999
In 1999, world production of crude oil was 76 million barrels per day, and the price of crude oil had fluctuated widely. From about $11 per barrel in early 1970, it steadily climbed to its height of $50 per barrel in 1980, and then continuously declined to a low of $10 in 1999. With the resulting price of gasoline under $1 per gallon, American consumers abandoned their earlier habit of conserving gasoline and reverted to gas guzzling vehicles. more >>
- Economic espionage: if you cannot prevent it, then join it
"Psst. Wanna buy a corporate secret?" U.S. News & World Report, September 20, 1999
Espionage of corporate secrets is very rampant, and many corporations devote a great deal of effort and time to protecting their secrets. However, such protection is very costly, and some companies have started to realize that it is much more profitable to openly sell the secrets through a licensing agreement than to hide them. For example, Procter & Gamble, a giant maker of detergent, spends $1. more >>
- Economic linkage effects of September 11, 2001 terrorist attacks
"What's Eating Those Giant Media Stocks?" and "Demand Up for Security Services," New York Times, September 27, 2001
An immediate effect of the September 11, 2001 terrorist attacks was the more than 50% reduction of tourists traveling to such popular areas as New York, Las Vegas, New Orleans and Orlando. This in turn depressed the stock values of those giant media companies with a heavy emphasis on tourism.
For example, Walt Disney experienced an immediate decline of its stock value by more than 26%. more >>
- Higher educational institutions for profit
"A scholastic gold mine," U.S. News & World Report, January 24, 2000
Universities and colleges in the United States are traditionally non-profit institutions. They benefit students directly in terms of higher intellectual development, as well as higher earning power. These benefits are called private benefits, accruing only to those directly involved with higher education. more >>
- How to become an oligopoly firm in soft drink market?
(source: "A new-age drink war starts as Soda Flops," Time, December 18, 2000
There are many soft drinks in the market, yet the main suppliers of popular soft drinks are only two: Coke and Pepsi. The soft drink market in America is a very big business with annual sales of $58 billion. Coke, with its patented Coca Cola drink, enjoys the dominant role in the soft drink market, and runner-up Pepsi is always challenging Coke for the top spot. more >>
- How to become and remain to be an oligopoly firm
Columbia Encyclopedia, fifth edition, and "Tired of Each Other," Time, June 4, 2001
Oligopoly is a form of market, which is dominated by a few large firms producing basically similar products. In the United States, oligopolies occur in several industries. For example, four firms supply 94% of total demand in refrigerators and freezers, 90% in cigarettes, 86% in cereal breakfast, 84% in greeting cards, 77% in beers, and 66% in tires. more >>
- How to break the monopoly power of Microsoft
"So what happens if Microsoft loses?" Time, March 1, 1999
The U.S. Department of Justice is suing the Microsoft company as a monopoly under the Anti-Trust law. Such litigation takes years to complete. more >>
- How to protect your firm from economic espionage
"Eyeing the competition," Times, March 22, 1999
Stealing economic secrets from competitors is a very profitable undertaking, and economic espionage is as old as political or military espionage. However, recently, economic espionage has become more prevalent and expanded beyond national boundaries.
Ironically, as an economy develops and products become more complicated to produce, it becomes easier to obtain product secrets surreptitiously. more >>
- Offshore banks may be havens for tax dodgers as well as international terrorists
"Banking on secrecy," Time, October 22, 2001
Offshore banking is one of the most rapidly growing industries in recent years. Offshore banks exist in places ranging from small countries such as Liechtenstein, Panama and the Cayman Islands to Vanuatu, a tiny rock in the middle of the Pacific. Together they hold total deposits of $5 trillion. more >>
- Price of Prescription Drugs and Oligopoly
"Who's really raising drug prices?" Time, March 8, 1999
Americans spend nearly $100 billion annually on prescription drugs. Consumer demand for the drugs is not significantly affected by their prices, because at the present there are few substitutes for the drugs for treatment of serious pain and sickness, and costs of the drugs are to a great extent borne by insurance companies and the government. Demand for a good that has few substitutes and/or in which the cost of the demand makes up a small portion of a consumer's budget (because of insurance coverage) is price inelastic. more >>
- Should local telephone service be a monopoly or competitive?
"The FCC should crack down on the Bells," BusinessWeek, May 21, 2001
Telephone service in America, both local and long distance, used to be a monopoly, because all telephone communications had been carried over telephone lines. Initial installation of these lines throughout the United States was enormously expensive (i.e., very high initial fixed costs), yet once installed, subsequent operating costs were very marginal. more >>
- The importance of personal ideas and entrepreneurship in the modern economy: the story of Dell Corporation.
(source of information, Public Broadcasting System, May 2001.
In the fully developed economy of the United States, dominated by business conglomerates with $100 billion in assets, can an individual without large capital compete and succeed in business? The answer is definite "yes," as Dell Computer Corporation can attest.
As personal computers were becoming popular, many people wanted to have a computer custom-made for their specific purposes. Such desires can be more quickly and effectively communicated between customers and manufactures, instead of being relayed through a salesperson. more >>
- Tobacco industry is prosperous again
"Why tobacco won't quit," Time, July 2, 2001
In 1998, the tobacco industry seemed to be given a death sentence. The industry's four largest firms agreed to pay $206 billion to 46 states over the next 25 years to compensate for tobacco-related illnesses, and to stop advertising to minors.
Price of cigarettes, including legal settlement costs of 58 cents per pack directly levied to smokers, increased from $1. more >>
- Vertical integration in the entertainment industry: the 1996 merger of Disney Co. and ABC television
"TV Turns Vertical," Newsweek, October 19, 1998
A vertical integration refers to a merging of firms in the same industry but at different levels of the production process. For example, if the Boeing Company, an aircraft manufacturer, purchased American Airlines, it would constitute vertical integration. Often the objective of such integration is to create a positive sum, or a synergy, so that the profit of the larger integrated firm is greater than the sum of the profits of the two pre-integrated firms. more >>