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INVESTIGATION ON TAOBAO SERVICE EDBUS: ECONOMICS DEPARTMENT Shelly Bok
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WHAT IS THE TAOBAO SERVICE? Provided by the Business Club Helps buy products on Taobao for people who don’t know how to use the website 10% service fee
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MONOPOLY Definition: the exclusive possession or control of the supply or trade in a commodity or service Why is Taobao service a monopoly? Though kids who CAN read Chinese may help others (who can’t read Chinese) buy the products off the website, this is not very usual (and kids do it as a favor does not take money) Business Club is the only “company” that provides the service.
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MONOPOLY GRAPH Profit-Maximization Quantity at which MC = MR Price at which the Q touches D = AR
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ABNORMAL PROFIT
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MONOPOLISTIC COMPETITION IF some students start helping others buy Taobao and take service fee
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PERFECT COMPETITION IF EVERY student starts helping others buy Taobao and take service fee
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PRICE TAKERS
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URL SOURCES http://www.economicshelp.org/microessays/marke ts/monopoly-diagram/ http://www.economicshelp.org/microessays/marke ts/monopoly-diagram/ http://www.bized.co.uk/sites/bized/files/images/dia grams/small/moncomp_srtolr.gif http://www.bized.co.uk/sites/bized/files/images/dia grams/small/moncomp_srtolr.gif http://upload.wikimedia.org/wikipedia/commons/t humb/4/43/Economics_Perfect_competition.svg/56 0px-Economics_Perfect_competition.svg.png http://upload.wikimedia.org/wikipedia/commons/t humb/4/43/Economics_Perfect_competition.svg/56 0px-Economics_Perfect_competition.svg.png http://www.economicshelp.org/wp- content/uploads/blog-uploads/2008/01/perfect- competition1.jpg http://www.economicshelp.org/wp- content/uploads/blog-uploads/2008/01/perfect- competition1.jpg
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