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Q1) Earlier this year Federal Government USA approved merger between Sirius and XM satellite radio companies. Approval process was very lengthy and extremely costly. Millions of dollars were spent lobbying for or against merger.

1. What, if any, shortcomings arise from monopoly pricing strategy (efficiency and consumer surplus)?

2. Are there any situations under which these shortcomings are mitigated?

3. Did government impose any requirements to make sure that merged company is not able to exercise monopoly power in satellite radio market? If so, what are those situations and do you think they will work?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M923172

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