Determine which type of market structures the sugar market in Vietnam most closely approximates to. Explain your answer by describing the characteristics of the market (including concentration level, degree of product differentiation and barriers to entry).Supporting evidence (facts and figures of market characteristics) is required.The facts and figures of market characteristics can be collected by doing some desk research. Search and read the industry reports by governmental offices, the news articles or journal publications of the industry (available in RMIT Library Databases), and select the most recent, reliable and relevant data to support your answer.Question 2: 10 marks Word limit: 400 wordsAnalyze how firms in the sugar market strategically set their prices to enhance their competitiveness in the domestic market.While developing your analysis, make sure you review the following concepts of different pricing behavior of firms and then determine which type of pricing behavior that sugar firms in Vietnam most closely approximates to.:Price-takers or price-makers.
Firms price setting in relation with the degree of product differentiation.
Price discrimination practice.
Price collusion practice.
Your discussions of firms pricing behavior can be positive statements (supported by facts and figures) or can be normative statements (supported by theory-based reasoning or opinions).Question 3: 10 marks Word limit: 300 wordsGame theory hypothetical case analysis:In a shopping mall, there are two most popular coffee shops: ABC and XYZ. There are no other chocolate products supplied/sold in the mall. In effect, the chocolate market in the mall can be described as an oligopoly.ABC and XYZ have been charging the same prices for their chocolate products. Their owners agreed on common prices, and these prices have been set at the monopoly profit-maximizing level. This collusion will enable the shops to earn an economic profit of $10,000 a year. However, if one shop cheats by giving its customers hidden discounts, such as complimentary cookies or chocolates, the cheater will gain market share at the others expense and her economic profit will rise to $20,000 while the other shop incurs an economic loss of $5,000.If both cheat each other secretly, they both will retain their share of the market but the cost of the cheating will reduce each shops profit to $3,000.Analyze the strategic interdependence of the two oligopoly firms. Define the term clearly and analyze it with the data given in the context of the question.
Construct the game matrix. Clearly define the players, possible actions of the players, and the according payoffs.
If each firm pursues their self-own interest, what is the most likely strategy each of them will follow? Explain.
What is the Nash Equilibrium of this game?
If two firms seek for mutual interests, what is the best strategy for both of them to be better-off? What is the Pareto Optimum of the game?Question 4: 5 marks Word limit: 200 wordsThe public is now concerned of the diabetes illness in sugar consumption. It is argued that the Government should impose a policy to restrict the production and consumption of sugary products (such as candies, bakeries, soft-drinks, etc).Which is the type of market externalities mostly described in the situation of sugary products?
Illustrate the side effects of sugary products to society by a diagram.
Determine which policy the Government can impose to restrict the market activity of sugary products. Explain your answer.Note: The task does not need any introduction or conclusion, please just give answer to the questions above. However it is required to have reference section below the essay and the references should be cited in Harvard Style and they should be in alphabetical order.
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