[1 point] Oligopoly Hypothesis. Imagine you have only two other competitors in the market. Firms can compete in prices, quantities or quality. Assume one type of competition (competition in prices, in quantities or in quality) to answer the questions. 6.1. [0.25 points] Which strategy would you follow to attract clients? (verbal answer). 6.2. [0.25 points] There are three firm in the industry. Which incentives does your firm have to collude? Explain how collusion could take place. (verbal answer). 6.3. [0.5 points] Collusion depends on different variables (number of competitors, uncertainty, etc). Which factors could facilitate/prevent collusion in your sector? (verbal answer). [1 point] Monopoly Hypothesis. Assume the three firms in the sector decide to merge. 7.1. [0.25 points] How does it affect prices, quantities and profits? (numerical, graphical and verbal answers). 7.2. [0.25 points] How does it affect consumers? Are they better or worse off? (numerical, graphical and verbal answers). 7.3. [0.5 points] Given your type of product, do you think that antitrust authorities could block the merger? Why? (verbal answer)