Question

Suppose that three student organizations are interested in holding TA review session for the upcoming Econ101 Final. Each student organization has different values for these TA review sessions. The willingness to pay for each organization is given by the following demand curves where P is the price per hour of TA-led review sessions and Q is the number of hours of TA-led review sessions: Student Organization A: PA = 40 ? 5Q Student Organization B:PB = 30 ? Q Student Organization C: PC = 70 ? 2Q The cost of providing one hour of a TA-led review session is $20. Hence, the MC of an additional hour of a TA-led review session is MC = $20. The cost of providing one hour of a TA-led review session is $20. Hence, the MC of an additional hour of a TA-led review session is MC = $20. a) Suppose this market is treated as a competitive market. How many hours of review sessions will each organization want to have? How much will each organization contribute or pay for an hour of TA-led review session? Are there any free riders in this market? Explain your answer. b) Find the aggregate demand for this good if we recognize that it is a public good. c) What is the socially optimal number of hours of TA-led review sessions? How much should each organization contribute per hour in order to get the socially optimal number of hours of TA-led review sessions? Your answer may be left in fractions and does not need to equal a whole number of hours.

Answer 1

Section 1 of the Sherman Antitrust Act was passed by Congress accordingly with the expanding predominance of the monopolizing trust. According to its dialect, Section 1 of the Sherman Act attempts to forbid "every contract is a combination of either trust or conspiracy, in limitation of trade. However, the
courts have declined to apply a per se rule of interpretation to Section 1 because Doing as such would
make almost every business illicit or illegal, on the grounds that it is hard to have a business course of action without it also attempting to control trade.

The defendants can basically be considered as Pipemakers who were operating under an agreement. At the point when dedicated municipal bodies offered the projects accessible to the lowest bidder, all organizations, however, the one designated would overbid, ensuring the accomplishment of the assigned low bidder if no bidder outside the group presented an offer.

The legislature contended that some antitrust violations, for example, bid rigging, were such unfortunate anti-competitive acts that they were constantly illicit as called per se rule. The defendants stated that it was a sensible restriction of trade and that the Sherman Act couldn't have intended to prevent such limitations.