FRE 306 Sample Midterm_Notes on Answers0

FRE 306 Sample Midterm_Notes on Answers0 - 4. The Canadian...

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FRE 306 Sample Midterm Section I: 1. a, e 2. b 3. a, c, e 4. c, e Section II: 1. The coop represents an alternative to the farmers, and if the coop is as efficient as the existing private processor, then the coop could compete with private processors, reduce the private firm’s monopsony power, and raise the farm-level price 2. Lower farm prices in the harvest season. 3. True: Draw MR curves for each of the two demand curves to see this result.
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Unformatted text preview: 4. The Canadian dairy product firm could compete only if it could offset the raw milk cost disadvantage with other cost savings or higher product revenues compared to the US firm. 5. It is one method (recall (P MC)/P). Estimating the elasticity of the demand curve facing that firm is another. 6. Many factors could cause large farm-to retail margins, not just the reason listed....
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