Suppose that there are only three types of fruit sold in the United States. Annu

Question

Suppose that there are only three types of fruit sold in the United States. Annual sales are 1,300,000 tons of blueberries, 5,600,000 tons of strawberries, and 11,000,000 tons of bananas. Suppose that of those total amounts, the Sunny Valley Fuit Company sells 1,200,000 tons of blueberries, 900,000 tons of strawberries, and 8,500,000 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) 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) 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)

Explanation / Answer

Answer a. Sunny Valley Market Share - Blueberries = 1,200,000 tone (Sale) / 1,300,000 tons (Total Market) Sunny Valley Market Share - Blueberries = 92.31% (Approx.) If 90-60-30 rule is apply, Sunny Valley is a monopolist, because it has market share of more than 90%. Answer b. Sunny's Share Total Market (In tons) (In tons) Blueberries            1,200,000            1,300,000 Strawberries                900,000            5,600,000 Total            2,100,000            6,900,000 Sunny Valley Market Share - All type of Berries = 2,100,000 tons / 6,900,000 tons Sunny Valley Market Share - All type of Berries = 30.43% If 90-60-30 rule is apply, Sunny Valley would not ruled as monopolist, because it has market share approximately equal to 30% . Answer c. Sunny's Share Total Market (In tons) (In tons) Blueberries            1,200,000            1,300,000 Strawberries                900,000            5,600,000 Bananas            8,500,000          11,000,000 Total          10,600,000          17,900,000 Sunny Valley Market Share - All type of Fruits = 10,600,000 tons / 17,900,000 tons Sunny Valley Market Share - All type of Fruits = 59.22%

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