2. R2: Non-pricing strategy can also raise revenue + limitations

3. Consider commenting on your friends' strategies to suggest improvements or ask questions

However, the CCCS may not need to intervene. Afterall according to to extract 3, parties may report anticipated mergers or mergers to the CCCS if there are serious concerns whether it may lead to a substantial lessening of competition. Taking a less draconian stance than the other paragraph, it is still possible that the existence of NTUC which has 41.1% of the market share keeps the merged entity in check. The merged entity would only have slightly more market share than NTUC. Perhaps it is possible that the merger actually improves the level of competition of supermarkets in Singapore. For example, now NTUC would have to directly compete with one merged entity, instead of Sheng Shiong and DFI individually. The competition would be more clear, leading to a greater foresight. Thus, this could possibly encourage NTUC and the new merged entity to conduct more pricing and non pricing strategies, such as price competition or AC/MC pricing which would actually allow consumers to be able to purchase goods at lower prices, thus benefiting them. These two supermarkets could also perform non-pricing strategies such as R&D, like process and product innovation, which would lower the AC and MC, or increase MR and AR. Other supermarkets may also be able to learn from this R&D. Afterall imperfect information isn’t “no information”. Other supermarkets could also learn from this R&D and be able to improve their own businesses.

shengshiong and DFI combined 48.1%, this will dominate mkt as they will now have greater mkt share than NTUC; moreover NTUC + shengshiong & DFI after merger will be 89.2% > 60% thus these firms will have price setting ability and will dominate the market. for other smaller firms, they will not be able to earn as much profits and will shut down in the long run

should not intervene: increased competition > increased innovation, plus merger can combine technologies of both companies to increase consumer welfare, product and process innovation. Brings benefits to consumers. Process innovation; increased price competition, becomes more affordable for these consumers as well

R2: shouldn’t intervene

• firm: higher market share, other firms forced to leave due to too much competition from dominant firm

• consumer: market power might cause firms to increase prices making goods less affordable

R2: dont intervene as merger will increase supernormal profits which allows them to reap ieos and lower prices

R2: allowing them to merge create competition for ntuc and prevent monopoly

R2: CCCS should not intervene in the merger as the merged firm can reap internal economies of scale and thus pass cost savings to consumers

• not incentivised to R&D

Other firms may shut down

• Competitive pricing

• Other firms can’t compete

• Market dominance

R2 should not

Consumer

• have lower prices due to IEOS

• Have money to R&D so can have better quality or variety

• when the firms merge, they are better able to reap IEOS allowing them to reduce prices

• due to mutual interdependence, other firms will also reduce price to keep market share

• for small firms especially, who cannot reap much IEOS, they may make subnormal profits in the long run

• hence they shutdown and exit the market, leading to loss of variety in the market

R2: building on R1; the consumers can benefit in terms of lower prices

• IEOS from R1

• consumer surplus increases

• also becasue fall in close substitutes -> fall in product variety -> thus fall in consumer welfare as well

• Consumer surplus, consumer choice decreases

• Firms can build higher BTE —> Rival firms: DD decrease, rev decrease, profits decrease —> may shut down

R2:

• Larger mkt—> higher scale of production—> enjoy lower unit cop—> IEOS—> productive efficiency improves —> firms may pass on cost savings instead—> consumer surplus increases + product quality increases

• Increase contestability of market—> push rival firms to innovate as well???

R2: CCCS should not intervene in the merger -> larger scale of production -> reap internal economies of scale -> pass on cost savings to consumers

increased market share which allows them to raise prices but this decreases consumer welfare

should not:

IEOS through higher production

share existing capital

R2: Merged firms can enjoy IEOS, can charge lower prices. Thus, firms enjoy lower costs, and will pass on cost savings to consumers via lower prices.

• Merger causes the firms to merge

• AR and MR become greater and more price inelastic

• using magic, I conclude that prices of supermarket goods increases ==> If prices of essential goods such as my milk and vegetables increases, there will be equity issues so consumers are worse off

R2: CCCS should not intervene because consumers get better products through product innovation, so consumers are better off

• More market power and more revenue and supernormal profits and more IEOS ==> more money to innovate and make better good, especially in this context where supermarkets can make their own brands like what NTUC does

however, haha, we know big corpos won’t innovate because they love the money pouring in their pockets and shareholder pockets therefore I conclude that CCCS should intervene because, while the supermarkets COULD innovate, they don’t have a big enough incentive to do so; the increase in price is more likely to happen more readily compared to product innovation

R1: should intervene

• merger will result in them having an ever larger market share -> greater market dominance -> greater ability to set prices and control output

• merger will have greater brand loyalty and thus demand, PED will also be less than 1, curve steeper

• AR and MR shift right

• smaller firms will shut down in LR

• also may not have incentive to innovate / product differentiate in LR, consumer welfare decrease

R2: shld not intervene

• greater iEOS so can have lower cost per unit product

• pass on lower costs to consumers

• increase consumer welfare

• Decrease in variety of products for consumer

• increase market share of the merger firm, increase in TR => small firms exit due to subnormal profits

R2:

• IEoS, cost-saving passed on consumer in the form of lower prices

• Merged talent pool => better capacity to do R&D/marketing

• Higher quality of goods/lower cost if increased profited are invested into R&D

Predatory pricing; the competition is an oligopoly, with two big firms merging, so this will (probably) work in killing off other supermarket chains, therefore reducing competition, therefore increasing profits and securing supernormal profits

Non-Pricing Strategies:

Diversification; sell more than just vegetables and fruits physically, e.g. use online shopping or sell more commodities, therefore you attract a larger consumer base, therefore increase AR and MR