In January 2007, XM enjoyed about 58 percent of satellite radio subscribers, and Sirius had the remaining 42 percent. Both firms
were suffering losses, despite their dominance in the satellite radio market. In 2008, the DOJ decided not to challenge a merger, and these two firms united to become Sirius XM. If you were an economic consultant for Sirius, which of the following would NOT be a viable economic arguments designed to persuade the DOJ not to challenge the merger? 1)Sirius and XM compete against other products such as broadcast radio and MP3s.
2)At least one of these firms is financially unstable.
3)Rapidly changing technology in the portable music industry would prevent anticompetitive behavior.
4)The merger will help to increase the companies' market power.
5)There would be significant cost savings if the merger took place.
(b) Business transactions refers to the transactions that are related to only business, such as purchase of land, machinery, goods for business purposes. Any type of personal transaction is not included in business transaction.
Better quality can help to reduce many costs such as customer’s dissatisfaction cost, inspection cost and warrant and service cost. When customers don't like the quality of the product they are likely to buy the same product from somewhere else that is the dissatisfaction cost. Still, maintenance cost is likely to incur no matter how good the quality is. Maintenance cost helps to keep the product clean and fresh for long-term use.
