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 12,000,000 tons of bananas. Suppose that of those total amounts, the Sunny Valley Fruit Company sells 1,200,000 tons of blueberries, 900,000 tons of strawberries, and 9,200,000 tons of bananas.

Instructions: Round your answers to two decimal places.

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)   No   Yes   Likely

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)   Likely   Yes   No

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)   No   Likely   Yes

Answer 1

a. What is Sunny Valley’s market share if the relevant market is blueberries?

(1,200,000/1,300,000) X 100 = 92.31%

If a court applies the “90-60-30 rule” when considering just the blueberry market, would it rule that Sunny Valley is a monopoly?

-Yes

b. What is Sunny Valley’s market share if the relevant market is all types of berries?

[(1,200,000 + 900,000)/(1,300,000 + 5,600,000)]*100

= 30.43%

Would the court rule Sunny Valley to be a monopolist in that market?

-No

c. What if the relevant market is all types of fruit? What is Sunny Valley’s market share?

[1200000+900000+9200000]/[1300000+5600000+12000000]*100

=11300000/18900000 = 59.79%

Would the court consider Sunny Valley to be a monopolist?

-Likely