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 10,000,000 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 7,900,000 tons of bananas.

Question

Annalise Hart

Business

24 November, 02:08

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 10,000,000 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 7,900,000 tons of bananas.

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Ruben Lozano · Answer 1

a. What is Sunny Valley's market share if the relevant market is blueberries? If a court applies the "90-60-30 rule" when considering just the blueberry market, would it rule that Sunny Valley is a monopoly?

Sunny Valley's market share of blueberry market = 1,200,000 tons / 1,300,000 tons = 92.31%, a court would definitely consider them a monopoly

b. What is Sunny Valley's market share if the relevant market is all types of berries? Would the court rule Sunny Valley to be a monopolist in that market?

Sunny Valley's market share of all berries = 2,100,000 tons / 6,900,000 tons = 30.43%, a court would definitely not consider them a monopoly.

c. What if the relevant market is all types of fruit? What is Sunny Valley's market share? Would the court consider Sunny Valley to be a monopolist?

Sunny Valley's market share of all fruits = 10,000,000 tons / 16,900,000 tons = 59.17%, a court would probably consider them a monopoly.

Explanation:

The 90-60-30 rule used by courts to determine if a company is a monopoly or not basically states that if a firm controls a certain % of the market:

90% of market ⇒ definitely a monopoly 60% of market ⇒ probably a monopoly 30% of market ⇒ definitely not a monopoly