PROBLEM SET 2 The following questions relate to the first case

The following questions relate to the first case that we will discuss in class on Wednesday, November 5th. “Sagasco Holding Limited”, Jose Gomez-Ibanez and F.M. Scherer, Harvard Kennedy School Case #1484 Please read the case in advance of the class and answer the following questions.

1. (a) Is it appropriate to think of all of Australia as a single geographic market for the production of natural gas? If so, explain why. If not, what are the relevant geographic markets?
2. (b) Based on your geographic market definition(s) above, would you expect the Santos / SAGASCO merger to lead to increased market power? Would you approve or deny the merger?
3. (c) Should regulators be concerned that Santos / SAGASCO would have a controlling share of the Moomba processing facility? Why or why not?