Industrial Economics And International Development

Industrial Economics And International Development
Introduction
There exist numerous economic literature in which rights are considered as a means of providing solutions to technical aspects of the economy. In this case, governments should have the ability of freeing their citizens from poverty and also the poor having the ability to hold the suppliers of their needs within private and public domain accountable. Technical solutions work in an environment where economic rights exist that allows people to utilize their land or businesses. The government suppliers can be held accountable through political processes such as democratic elections. The existence of rights for citizens within a society results into technical solutions that eventually ensure development.
The market definition can easily be informed through different perspectives that include competitive effects. For instance, the aspect of reduction in the percentage of significant rivals that offers certain products and services determines the pricing mechanism that ensures the existence of relevant market to such products. In the same way, such effects also help in the direct prediction of the competitive effects of joint ventures. The nature of market definition aspects focuses majorly on factors that influence demand substitution. This includes consumer’s ability and willingness to change products owing to price differences and change in product quality including responsiveness from the suppliers. There are always numerous possible substitutes for products and services that are subject to scrutiny from customers due to merger. However, there is always the possibility of customers assessing in different manners the proximity of different products. This happens in scenarios where the products and suppliers within different regions act as perfect substitutes for one another to varying degrees. For instance, the idea of defining the market based on inclusion and exclusion of substitutes is a more simplified process incapable of defining the variations of products within the market fully.
Comparably, a broad market definition that encompasses product, as well as geographic substitutes, usually leads to misleading market shares. The market shares of different products within markets that have narrow definitions have a higher probability of capturing relative competitive nature, therefore, reflecting accurate competition between substitutes. Due to such occurrences, the antitrust markets that are properly defined tend to exclude the substitutes that offer an alternative option to customers in case of price increase. International agencies are known to utilize such principles that concern market definition in the process of evaluating appropriate market niches. The area of competitiveness that is affected by the merger may be geographically defined through boundaries for the purposes of accommodating consumers’ ability on substitute products and also suppliers ability to offer services to specific customers. Market definition principles as previously discussed in this study is applicable by Agencies in demarcating relevant market from either geographic or product dimensions.
The scope with which geographic markets are defined is largely dependent on the cost o...