Assignment:
Questions
1. What type of merger would this be? (Conglomerate, Vertical or Horizontal). Why? Explain your choice
2. Which types of mergers are anti-competitive and how do each type reduce competition?
3. Why is the DOJ opposing this merger (economic reasoning...that is)?
4. Santoreilli(2nd article/reference) contends that the merger makes sense. What are his economic reasons for contending that the merger would not hurt competition, i.e., make sense?
5. Wu(3rd article) contends that blocking the merger might make sense. Under what economic circumstances/conditions does blocking the merger make sense (or how would allowing the merger to go forward decrease competition, i.e. be anti-competitive)
In 2016 then President Obama introduced legislation imposing a per-unit tax on the production and mining of coal ($ per ton of coal). Coal is largely used in the production of electricity in the mid-west. Electricity generators burn coal to drive turbines which produce electricity for commercial and residential customers served by their transmission and distribution network. Coal in the US contains a considerable amount of Sulphur and other toxins that are emitted into the atmosphere (when burned) and into water/ground when disposed of.
1. Under what circumstances would such a tax increase economic welfare, i.e., decrease deadweight loss? Explain how the tax would affect market price and quantity and affect total surplus.
2. The Trump Administration has proposed to eliminate this tax.
3. Would this policy lead to an increase or decrease in economic welfare, i.e., an increase/decrease in Total Surplus (Sum of Consumer and Producer Surplus)? Explain your answer.
4. Recently research and development in solar has led to a decrease in the cost of solar energy production and solar panels. It has led to an increase in natural gas production (through the development of new production techniques such as fracking). What would be the effects of these two developments on the Demand for Coal? Explain and/or graph your analysis.
Resources:
1. Justice Department Sues to Block AT&T Merger, Nov. 20, 2017, Kang & Merced, NY Times (https://www.nytimes.com/2017/11/20/business/dealbook/att-time-warner-merger.html)
2. M.J. Santorelli, Why the AT&T Merger Makes Sense, (op-ed), Nov. 16, 2017, NY Times (link to click on, right-hand side of first article above)
3. Tim Wu, Why Blocking the AT&T Time Warner Merger Might be Right, NY Time, NY Times, (op-ed), Nov. 9, 2017 (link to click-on in 1st article)