Suppose that there are only three types of fruit sold in the United States. Annu
ID: 1223984 • Letter: S
Question
Suppose that there are only three types of fruit sold in the United States. Annual sales are 1,200,000 tons of blueberries, 5,400,000 tons of strawberries, and 12,000,000 tons of bananas. Suppose that of those total amounts, the Sunny Valley Fruit Company sells 1,100,000 tons of blueberries, 900,000 tons of strawberries, and 9,200,000 tons of bananas.
Instructions: Round your answers to the nearest whole number.
a. What is Sunny Valley’s market share if the relevant market is blueberries?
percent.
If a court applies the “90-60-30 rule” when considering just the blueberry market, would it rule that Sunny Valley is a monopoly?
(Click to select)YesLikelyNo.
b. What is Sunny Valley’s market share if the relevant market is all types of berries?
percent.
Would the court rule Sunny Valley to be a monopolist in that market?
(Click to select)LikelyNoYes.
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?
(Click to select)NoLikelyYes.
Explanation / Answer
The following table describes the overall production of all the types of berries is given below
Total (in tons)
Sunny Valley (in tons)
Percentage
Blueberries
1200000
1100000
91.66667
Strawberries
5400000
900000
16.66667
Banana
12000000
9200000
76.66667
Total
18600000
11200000
60.21505
a)
Sunny Valley’s market share in the market for blueberries is 91.67 percent as calculate by (1,100,000/1,200,000)*100 = 91.66667
Yes. If a court applies the “90-60-30 rule” when considering just the blueberry market, it will rule that Sunny Valley is a monopoly since underthis rule, if the market share is 90%, the firm is said to be a monopoly.
b)
Sunny Valley’s market share in the market for all types of berries is 30.3 percent as calculate by (2,000,000/6,600,000)*100 = 30.30303
No. If a court applies the “90-60-30 rule” when considering just the berries market, it would not rule that Sunny Valley is a monopoly as the market share is 30%
c)
Sunny Valley’s market share in the market for all types of fruits is 60.21 percent as calculate by (11,200,000/18,600,000)*100 = 60.21505
Likely. If a court applies the “90-60-30 rule” when considering fruit market, it would rule that Sunny Valley is a probably a monopoly.
Total (in tons)
Sunny Valley (in tons)
Percentage
Blueberries
1200000
1100000
91.66667
Strawberries
5400000
900000
16.66667
Banana
12000000
9200000
76.66667
Total
18600000
11200000
60.21505
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