Suppose that there are only three types of fruit sold in the United States. Annu
ID: 1205818 • Letter: S
Question
Suppose that there are only three types of fruit sold in the United States. Annual sales are 1,000,000 tons of blueberries, 5,000,000 tons of strawberries, and 12,000,000 tons of bananas. Suppose that of those total amounts, the Sunny Valley Fruit Company sells 900,000 tons of blueberries, 900,000 tons of strawberries, and 9,200,000 tons of bananaa. What is Sunny Valley’s market share if the relevant market is blueberries?
If a court applies the “90-60-30 rule” when considering just the blueberry market, would it rule that Sunny Valley is a monopoly? Put in percent.
NoYesb. What is Sunny Valley’s market share if the relevant market is all types of berries?
percentage. Would the court rule Sunny Valley to be a monopolist in that market? YesNo.
c. What if the relevant market is all types of fruit? What is Sunny Valley’s market share? percent.
Would the court consider Sunny Valley to be a monopolist? Yes/No.
Explanation / Answer
a. Sunny Valley Fruit company’s share in blueberries market = 900,000 / 1,000,000 x 100 = 90%
If a court applies the “90-60-30” rule, would it rule that Sunny Valley is a monopoly? Yes / (100%)
Sunny Valley total production of all types of berries = 900.000 (BB) + 900,000 (SB) + 9,200.000 (B)
Sunny Valley’s total production of the fruits = 11,000,000
Sunny Valley’s market share if the relevant market is all types of berries:
900,000 + 900,000 = 1,800,000
Production of berries in the U.S. = 6,000,000
b. Market share of Sunny Valley for berries = 1,800,000 / 6,000,000 x 100 = 30&
Would the court Sunny Valley as a monopolist in this market? No.
Sunny Valley’s total production of the fruits = 11,000,000
Total production of fruits in the U.S. = 18,000,000
c. Market share of Sunny Valley for all types of fruits = 11,000,000 / 18,000,000 x 100 = 61.11%
Would the court consider Sunny Valley to be a monopolist? Yes. Probably a monopoly.
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