What happened in the lysine market

Assignment Help Business Economics
Reference no: EM131699564

During the 1980's, most of the world's supply of lysine was produced by a Japanese company named Ajinomoto. Lysine is an essential amino acid that is an important live-stock feed component - more than 30,000 tons- to use in livestock feed at a price of $1.65 per pound. The worldwide market for lysine however, fundamentally changed in 1991 when U.S. based Archer Daniels Midland (ADM) began producing lysine - a move that doubled worldwide production capacity. Experts conjectured that Ajinomoto and ADM had similar cost structures and that the marginal cost of producing an distributing lysine was approximately $0.7 per pound. Despite ADM's entry into the lysine market, suppose demand remained constant at Q=208-80P (in millions of pounds). Shortly after ADM began producing lysine, the worldwide price dropped to $0.70. By 1993, however, the price of lysine shot back up to $1.65. 

Considering the following theories below, provide a potential explanation for what happened in the lysine market.

  • Oligopoly
  • Sweezy Oligopoly
  • Cournot Oligopoly
  • Best-Response Function
  • Cournot Equilibrium
  • Isoprofit Curve
  • Stackelberg Oligopoly
  • Bertrand Oligopoly
  • Cournot Duopoly
  • Stackelberg Duopoly
  • Collusive Duopoly

Substantiate the answer with calculations whenever possible.

Reference no: EM131699564

Questions Cloud

Analyze erps system effectiveness by implementing a business : Analyze ERP's system effectiveness by implementing a complex business process (consider impact on agility and efficiency combining ERP and BPM in organization).
Permanent form of government : A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public.
Sketch the companys organizational structure : Evaluate the company's business strategy and global competitiveness plan. Conduct an internal assessment using SWOT analysis.
Calculate the maximum safe internal pressure : The longitudinal joint in an 8-ft-diameter closed cylindrical steel boiler is butt welded with a joint efficiency of 85%. The boiler plate is 3 4 in. thick.
What happened in the lysine market : Considering the following theories below, provide a potential explanation for what happened in the lysine market.
Identify one of your favorite ads and describe the message : Identify one of your favorite ads and describe the message used the medium used, and the language used. How does this relate to target segments
Calculate the required wall thickness : A closed cylindrical tank for an air compressor is 24 in. in diameter and is subjected to an internal pressure of 450 psi.
What are the long-run average and avoidable cost functions : A) What are the long-run average and avoidable cost functions? B) What is the profit maximizing level of output?
Analyze the five business-level strategies : Analyze the five business-level strategies discussed in Chapter 4 to determine which strategy the company you researched most likely applies.

Reviews

Write a Review

Business Economics Questions & Answers

  Explain maturity intermediation-denomination intermediation

Describe how a Commercial Bank (JP Morgan Chase etc) acts as an intermediary in the creation and flow of money? Example, how does it use checking and savings accounts for mortgages, auto loans, small business loans etc. Explain, maturity intermediati..

  Bribery and corruption are economic in nature

Most recommendations for dealing with bribery and corruption are economic in nature; for example raising salaries, increasing punishment, and stepping up surveillance. Are there other ways to deal with corruption and bribery from a broad, social p..

  What is the profits of each firm as functions of q1 and q2

Suppose a second firm enters the market. let Q1 be the output of the first firm and Q2 be the output of the second. What is the profits of each firm as functions of Q1 and Q2.

  How much will the bank pay for the mortgage

A couple sold their home. In addition to cash, they took a mortgage on the house. The mortgage will be paid off by monthly payments of $232.50 for 10 years. The couple decides to sell the mortgage to a lend bank. The bank will buy the mortgage, but r..

  Derive an expression for the marginal cost curve

The Paradise Shoes Company has estimated its weekly TVC function from data collected over the past several months, as TVC = 3450 + 20Q + 0.008Q2 where TVC represents the total variable cost and Q represents pairs of shoes produced per week. Describe ..

  Daily budget constraint without any program participation

Suppose a single parent can work up to 16 hours per day at a wage rate of $10.00 per hour. Various incomes maintenance programs have been developed to assure a minimum level of income for low-income families, such as Aid to Families with Dependent Ch..

  What aspects of the current food system would an economist

How would an economist respond to the opinions expressed in this documentary? What aspects of the current food system would an economist view as a positive development?

  Remodeling industry is an increasing-cost industry

Suppose you own a home remodeling company. You are currently earning short-run profits. The home remodeling industry is an increasing-cost industry. In the long run, what do you expect will happen to

  Elucidate decrease in aggreage demand will lead to

If combination of rational expectation and perfectly competitive markets , a decrease in aggreage demand will lead to? A. A small decrease in real GDP B. No change in real GDP C.

  What is the link between an international business strategy

What is the link between an international business strategy and its human resource policies, with regard to expatriate employees and their compensation?

  Necessity of being able to measure assessments

Some methods of initial assessment appear to be more useful than others. If you were starting your own business, which initial assessment methods would you use and why? Keep in mind the necessity of being able to measure assessments.

  Hypothetical economy in short-run equilibrium output level

Macroeconomic equilibrium and the multiplier effect The following graph shows a hypothetical economy in short-run equilibrium at an output level of $400 billion and a price level of 100. Suppose that potential GDP in this economy is $200 billion. Use..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd