...because they are numerous, variety of choices, and no single entity has much power over prices. The health insurance can be considered as rapid growth industry. Recently, this industry is transforming in a rapid way and evolving into an oligopoly. Insurance markets in many states are eventually controlled and dominated by a few large firms. There were more than five hundred health insurers involved mergers between 1998 and 2008 (Bakhtiari, 2010). Although there are hundreds of small insurance companies operating in the market, the industry Led by WellPoint, 12 health plans cover two-thirds of the enrollment in the U.S. commercial-insurance market (Bloomberg News, 2010). An analyst's report cited in the article predicts there will be 100 insurers with around 200,000 members could be forced out of business. Smaller insurers are increasingly unable to invest in the infrastructure and technology to effectively manage care (Bakhtiari, 2010). However, mergers have been the main power rather than small insurers going out of business. 2. Hypothesize the basic short-run and long-run behaviors of the model in the industry you have chosen in a “market economy” This paper uses Kinked-Demand theory of oligopoly; there is no single theory that explains oligopoly behavior. The kinked demand model assumes that if one firm raises the prices, other firms will not follow to increase. If the firm reduces its price, it is assumed that its competitors will follow suit and reduce their prices as well...
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...health insurance in the United States has experienced rapid growth. There are numerous providers representing a competitive marketplace where no single entity rules over prices. However, the industry is undergoing massive transformation processes and slowly evolving into an oligopoly, where only a few large firms will eventually control market dynamics. Throughout the years there has been more than 500 mergers involving health insurers (Bakhtiari, 2010). Although many small insurance companies operate in the market, the industry Led by WellPoint, 12 health plans cover two-thirds of the enrolment in the U.S. commercial-insurance market (Bloomberg News, 2010) . There are reports that predict over 100 insurers with 200,000 members or less could be pushed out of business, because smaller insurers are unable to invest in the infrastructure and technology to effectively manage care (Bakhtiari, 2010). The good news is that small companies are being merged with larger companies rather than going out of business. The Long and Short Run Behaviors in a “Market Economy” We understand there is no single theory to explain oligopoly behavior, however for this comparison; we will use the Kinked-Demand theory of Oligopoly. The kinked demand model assumes that other firms will ignore the increase, if one firm raises its prices, while other firms in the industry will match any price cuts. These actions will result in a demand curve for the firm that is kinked at the current equilibrium price...
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...because they are numerous, variety of choices, and no single entity has much power over prices. The health insurance can be considered as rapid growth industry. Recently, this industry is transforming in a rapid way and evolving into an oligopoly. Insurance markets in many states are eventually controlled and dominated by a few large firms. There were more than five hundred health insurers involved mergers between 1998 and 2008 (Bakhtiari, 2010). Although there are hundreds of small insurance companies operating in the market, the industry Led by WellPoint, 12 health plans cover two-thirds of the enrollment in the U.S. commercial-insurance market (Bloomberg News, 2010). An analyst's report cited in the article predicts there will be 100 insurers with around 200,000 members could be forced out of business. Smaller insurers are increasingly unable to invest in the infrastructure and technology to effectively manage care (Bakhtiari, 2010). However, mergers have been the main power rather than small insurers going out of business. 2. Hypothesize the basic short-run and long-run behaviors of the model in the industry you have chosen in a “market economy” This paper uses Kinked-Demand theory of oligopoly; there is no single theory that explains oligopoly behavior. The kinked demand model assumes that if one firm raises the prices, other firms will not follow to increase. If the firm reduces its price, it is assumed that its competitors will follow suit and reduce their prices as well...
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...Course Description Nature and scope of economic science, its relationship with other social sciences; quantification of economic variables, theories of consumer behavior and of the firm: linear economic models; market structures; social accounting and basic elements of economic planning. Learning Outcomes: At the end of the course and having completed the essential reading and exercises, the students will be able to – Analyse and interpret the relationship between factors influencing demand and supply Explain and analyse the nature of production and its relationship to costs. Analyse business practices with respect to pricing and competition. Understanding the various strategic options in banking sector in the context of consumer behaviour and markets analysis. Understand and describe the concepts and measurement of gross domestic product, unemployment, and inflation. Understand and describe the difference between business cycles and economic growth and the factors that contribute to each. Page 1 of 6 Understand and describe the concept of Macroeconomic Equilibrium. Understand and describe how Aggregate Demand and Aggregate Supply determine equilibrium price and output in the short-run and long-run. Understand and describe the multiplier concept, how it is computed, and its qualifications and limitations. Analyze and describe the concepts, tools, and implementation of fiscal policy, its limitations and relative advantages and disadvantages, and how it affects aggregate...
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...Management Examination Paper Business Ethics Section-A Part One: Multiple Choices: 1. (a) Information Technology 2. (a) Equal distribution of all benefits & burdens on peoples 3. (c) Retributive Justice 4. (b) Free Markets 5. (d) Historical Materialism 6. (a) Pure Monopoly 7. (a) Highly concentrated Markets 8. (b) Chlorofluorocarbons 9. (b) Market Cost 10. (c) Both (a) and (b) Part Two: 1. Definition: Mineral depletion is the ratio of the value of the stock of mineral resources to the remaining reserve lifetime (capped at 25 years). It covers tin, gold, lead, zinc, iron, copper, nickel, silver, bauxite, and phosphate. At first glance, sustainability and mineral resource development appear to be in conflict. Mining depletes finite resources and in a strict sense, therefore, is inherently unsustainable. For instance, there is only a finite amount of copper in the earth’s crust, and each unit of copper extracted increases the fraction of the total copper resource base that is in use. Thus, it can be argued that if we continue to mine we will eventually exhaust the available supply of minerals. This perspective, however, ignores the dynamics of mineral supplies. In practice the non-renewable character of minerals may be less constraining than it might seem. Five factors make the benefits from mining much more sustainable than they initially appear to be. First, through the process of exploration and development, mining companies continually...
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...ECO/365 Final Examination Study Guide This study guide prepares you for the Final Examination you complete in the last week of the course. It contains practice questions, which are related to each week’s objectives. Highlight the correct response, and then refer to the answer key at the end of this Study Guide to check your answers. Use each week’s questions as a self-test at the start of a new week to reflect on the previous week’s concepts. When you come across concepts that you are unfamiliar with, refer to the Student Guide for that particular week. Week One: Fundamentals of Microeconomics Objective: Differentiate between macroeconomics and microeconomics. 1. Macroeconomics is the study of individual choice and how that choice is influenced by economic forces the study of the pricing policies of firms and the purchasing decisions of households the study of aggregate economic relationships an analysis of economic reality that proceeds from the parts to the whole 2. The invisible hand theorem comes from microeconomics macroeconomics sociology political science Objective: Analyze the effect of changes in supply and demand on the equilibrium price and quantity. 3. The law of demand states that the quantity demanded of a good is inversely related to the price of that good. Therefore, as the price of a good goes up, the quantity demanded goes up up, the quantity demanded goes down down, the quantity demanded goes down down, the quantity demanded...
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...Company Analysis Project – Final Paper – Southwest Airlines Charles M Mohr MBA 6008 – Global Economic Environment Capella University Doctor Halstead February 19, 2016 Abstract The aircraft carrier business contends in an oligopoly showcase. This implies just a few of airline companies control the significant bit of the business. Southwest Airlines is one of these organizations. They make up 16.6% of the business sector, second only to Delta. The motivation behind this paper is to talk about the microeconomic and macroeconomic situations that Southwest Airlines faces every day. The Airline Deregulation Act that was passed in 1978 was a huge impact on the aviation industry. There are administrative contemplations on financial choices, for example, group clamor and air quality. Southwest Airlines has moral (ethical) contemplations that should be tended to at whatever time financial choices are made. This paper additionally touches on the monetary hypotheses and models, including the Bertrand Model that Southwest Airlines ought to audit and consider for future accomplishment of the organization. Southwest Airlines must take after the Sustainability Accounting Standard for Airlines for all their bookkeeping purposes. Table of Contents Abstract 2 Microeconomic Environment 5 Macroeconomic Environment 8 Economic Implications 10 Regulatory Considerations on Economic Decisions 11 Ethical Considerations on Economic Decisions 13 Economic Theories and Models 14 ...
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...Advanced Placement Level Microeconomics Practice Examination Solutions by James Chasey Copyright © 2000 by Harcourt, Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from the publisher, except that, until further notice, the contents or parts thereof may be reproduced for instructional purposes by users of PRINCIPLES OF ECONOMICS by N. Gregory Mankiw. Portions of this work were previously published. ISBN 0-03-026997-0 1. A production possibility curve might be shifted outward by each of the following EXCEPT; A. Increase in immigration B. Movement toward a more open approach to free trade C. Decrease in unemployment D. Increase in educational levels of the general population E. All of the above would shift the PPC outward Answer C. Decrease in unemployment James Chasey 2. A production possibility frontier that is represented by a straight line rather than the usual bowed shape would indicate; A. Increasing opportunity cost B. Decreasing opportunity cost C. Constant opportunity cost D. Absolute and Comparative Advantage E. Comparative but not absolute advantage Answer C. Constant opportunity cost James Chasey [pic] Figure 1 3. If the current price for the perfectly...
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... Understanding the Steel industry using Michael Porter’s Five Forces Model Suggestions Road Ahead Major Steel Producers Introduction India has acquired a central position on the global steel map with its giant steel mills, acquisition of global-scale capacities by players, continuous modernisation, and improvement in energy efficiency. Steel companies from across the world have shown interest in the Indian steel industry due to its phenomenal performance. In India, the steel industry plays a significant role in the economic growth. India is world's fourth largest crude steel producer in 2011-12 with 89 million tonnes (MT) as per provisional data and is expected to become the second largest producer of crude steel in the world by 2015-16. India is also the world's largest producer of sponge iron with a host of coal based units, located in its mineral-rich States. The major contribution of the steel industry focuses on strengthening the sectors, such as infrastructure, constructions, automobile, transportation, industrial applications etc. Tata Steel has been named among the world's most ethical companies by an American think tank, Ethisphere Institute. Ethical business...
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...|[pic] |Syllabus | | |School of Business | | |ECO/212 (3 Credits) Version 6 | | |Principles of Economics | | |03/01/2012 - 03/29/2012 | | |PUERTO RICO CAMPUS | Copyright © 2009, 2008, 2006, 2004 by University of Phoenix. All rights reserved. Course Description This course introduces the fundamental theories of microeconomics and macroeconomics. The economic principles studied in this course apply to everyday life as students research an industry, debate issues with trade agreements, discuss the effects of a shift in labor supply and demand, and discuss the strengths and weaknesses of the Consumer Price Index calculation. In particular, students research an industry affected by the economy and perform an economic analysis of the chosen...
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...UNIVERSITY OF LAUSANNE Faculty of Business and Economics (HEC) COURSE: COMPETITIVE STRATEGY Master in Management (MScM) Fall 2012 WARNING! THIS IS A TENTATIVE SYLLABUS – THE GENERAL STRUCTURE WILL STAY THE SAME BUT THERE MIGHT BE CHANGES FOR SOME OF THE SESSIONS Professor: Jean-Philippe Bonardi Email: Jean-Philippe.Bonardi@unil.ch Tel: 021 692 3440 Office: Internef 604 Assistant: Mark Kuzmanic Email: Mark.Kuzmanic@unil.ch Office: Internef 621 The course will take place every Friday from 8:00am to 11:30am, in Room GENOPODE C First class: Friday September 21, 2012 A website for the course with a description of the sessions and posted material is available at: https://www.hec.unil.ch/docs/bonardi/cours/308 Overview Competitive strategy is about the analysis of how firms behave or should behave based on the type of industry structure and competitive threat they are facing. In this course, we will go through various theories, strategic tools and cases to understand how this type of analysis can be conducted effectively. More generally, the focus of this course is on strategic management - the process of choosing and defining purposes and objectives, formulating a strategy and implementing it. The course aims to develop your ability to see an organization as a whole and to understand how and why the various functions of a business are interdependent and need to be coordinated. Hence, the thrust of the course is the organization in its totality - the environment in which...
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...priories were not put in the right place. They unveiled a new paint scheme for their aircraft instead of focusing on getting the merger with US-Airways completed. Moving forward with the merger Americans weakness is their top level management priorities, aging fleet and non-committed employees. If you company is losing money then you need to go back to the basics do those right first then, and only then can you think about changing thing around or trying new and exciting new paint schemes or booking systems. The management needs to take care of the fleet and employees first before even thinking about customers. Without happy employees or safe aircraft you cannot run an airline productively. Also over the last six months sequestration is causing a lot of backups in the ATC system. America’s main hub in Chicago has felt quite a lot of this with capacity and efficiency down due to lack of ATC staffing. Americans strengths exist in the largeness of its fleet and especially after a merge with USAir “ Rick Seaney, CEO of FareCompare, fears that airlines are becoming ‘too big to fail’ such as the auto industry and banks. The domestic airline industry in the United States is becoming an oligopoly.” (Ecem) This is a great opportunity for American Airlines but maybe not for the general public trying to get a good deal. If they are “too big to fail” they will be able to charge the same amount as other airlines and not have to worry about undercutting from small airlines. The Rebranding of...
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...Competition within the UK Food Retail Industry Abstract This dissertation set out to explore the nature of competition within the UK Food Retail Industry as well as to evaluate the competitive strategies undertaken by firms in the market. This task has been undertaken through a critical analysis of a range of literature focussed on establishing the current state of play in the UK supermarket industry, examining general theory on competition and competitive strategy, as well as a review of literature that specifically addresses competition between supermarkets in the UK. Looking first at the nature of competition in the UK food retail industry, it was clear from the literature review that while the industry has many characteristics of an oligopoly as it is dominated by a small number of major firms, it is undoubtedly highly competitive. The evaluation of the competitive strategies undertaken by firms in the industry showed that between the leading firms in the market that Tesco had the best balance between price and customer perceived value but there was clear evidence to suggest that the other leading firms were positioning themselves around Tesco in order to reduce its apparent competitive advantages. While the analysis showed similar competitive strategies for the big four, it revealed different strategies being adopted by other firms in the industry who look to operate in niche markets within the food retail industry, such as Lidl and Aldi, who compete almost entirely on price...
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...Course Duration: The course duration is of 36 sessions of 75 minutes each i.e. 45 hours. 3. Course Contents: Module No: Module Content No. of Sessions 70 Marks (External Evaluation) 17 I II Fundamentals of Accounting Basic understanding of accounting, Accounting Concepts, Conceptual framework of financial statements, Accounting Policies, Journal Entries and preparation of accounts - Trial Balance to Balance sheet and profit and loss Account, Recognition of Income and Expenses, Provisions, Contingent Liabilities Accounting Standards and Applicability: Disclosure of Accounting Policies (AS-1), Valuation of Inventories (AS-2), Depreciation Accounting (AS-6), Income Recognition & Accrual Income (AS-9), Accounting of Fixed Assets (AS-10), Accounting for Intangible Assets (AS-26), Accounting for Investments (AS-13), 7 7 17 III IV V Preparing and Understanding Financial Statements : Corporate Balance sheet, Profit and Loss Account Funds Flow Analysis, Financial Statement Analysis & Contemporary Issues Students should select a particular company and do financial analysis of the same and prepare a report and give a presentation 7 7 8 18 18 Internal Evaluation (20 marks of CEC) 4. Teaching Method: The following pedagogical tools will be used to teach this course:...
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...THE ENDLESS CRISIS REPORT Introduction The Endless Crisis was written by John Bellamy Foster, the editor of Monthly Review and professor of sociology at the University of Oregon collaborating with Robert W. McChesney. The article came originally from the introduction of the book called The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the United States to China. The Great Financial Crisis and the Great Recession began in the United States in 2007 and quickly spread across the globe, which appear to be the turning point of the world history. The recovery plan was set to two year, however the world economy five years after crisis is still in the sluggishness. The Traid – United States, Europe, and Japan remain caught in a slow growth condition, financial instability, and high unemployment rate. As a consequence, the effects spread globally. Despite the slowdown of the global economy, China is the only country found out to be a bright spot as its economy is still expanding. Different views on the Stagnation In the United States, the focus of financial crisis shifted to the idea of economic stagnation. The idea of stagnation was introduced by authorities and published books as follow. Firstly, Ben Bernanke, chairman of Federal Reserve Board said on his speech in 2011 that the stagnation was not affects only the United States, but the global economy as a whole. He moreover stressed that he do not expect the long-run potential growth...
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