Akamai Technologies Is a Dominant Player in the Content Delivery

question 39

Multiple Choice

Akamai Technologies is a dominant player in the content delivery network (CDN) market. Akamai is not very diversified (i.e., is dependent on the CDN market) . If rival CDN providers such as Limelight Networks and Level 3 Communications lower their basic CDN service prices, what would be Akamai's likely response?

• A) Raise its prices
• B) Do nothing since it is the market leader
• C) Exit the industry
• D) Lower its prices

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Definitions:

Closely Held Corporation

A type of company that is owned by a small group of people who are usually closely associated with the business.

Publicly Trades

Pertains to companies whose shares are bought and sold on stock exchanges, allowing investors to purchase ownership interests in the businesses.

Auction Market

A market where buyers and sellers enter competitive bids simultaneously; the price is determined by the highest bid received by the seller.

Articles of Partnership

Legal documents that outline the terms, conditions, and responsibilities of each partner in a partnership business.