Assessment 6
Started on Wednesday, 8 November 2023,
State Finished
Completed on Wednesday, 8 November 2023,
Time taken
Marks 48.00/60.00
Grade 80.00 out of 100.00
Question 1
Second-degree price discrimination is the practice of charging
a.
each customer the maximum price that he or she is willing to pay.
b.
different groups of customers different prices for the same products.
c.
the reservation price to each customer.
d.
different prices for different quantity blocks of the same good or service.
Question 2
Read the following excerpt from Business Tech below and consider the Profit Payoff
matrix to answer the question that follow:
Competition Commission charges Wesbank and Toyota for collusion
“The Competition Commission has referred motor vehicle finance groups FirstRand
Bank, Wesbank, and Toyota Financial Services South Africa Limited (TFS) to the
Competition Tribunal for prosecution on allegations of dividing the market by
allocating customers or suppliers.
The Commission’s investigation revealed that Wesbank and TFS entered into an
agreement to divide markets by allocating customers or suppliers in the market for
the provision of vehicle finance in contravention of section 4(1)(b)(ii) of the
Competition Act. The motor vehicle finance market includes offering vehicle finance,
leases, and dealerships financing.
“FirstRand Bank Limited (FirstRand), through its WesBank division, and TFS are
involved in the provision of vehicle finance services. They are therefore supposed to
compete. They, however, concluded a shareholder agreement which contains
clauses that prevent them from competing,” the commission said.”
After an explicit agreement of collusion was confirmed by the commission and being
found to be illegal, Wesbank and Toyota each decided on their own to provide
vehicle finance at either a Cournot level or collusion level.
What is the Nash-Cournot equilibrium?
a.
80, 80
b.
90, 90
c.
60, 100
d.
100, 60
2
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