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Abstract
The motivations for this case study are the U.S. potato industry developments involving the implementation of a potato supply management program by a nation-wide group of cooperatives of potato growers during the period of 2005-2010. This program aimed to mitigate potato oversupply adversely affecting profitability of potato growers and provide fair returns for potato growers. The potato supply management program raised legal issues leading to antitrust lawsuits filed by potato buyers against potato growers and their cooperatives, which resulted in a large settlement. The case study introduces economic, business, and legal issues surrounding the implementation of this potato supply management program. The case study also provides simple contemporary applications of economic models of the profit-maximizing behavior of firms with seller market power in the U.S. potato industry. The case study presents a theoretical framework, which explains conduct and performance of the U.S. potato industry in alternative market scenarios, and a basic market and price analysis. The intended audiences are undergraduate and graduate students, as well as extension and outreach audiences. A teaching note includes a set of discussion questions and suggested answers. The teaching note also discusses teaching objectives, teaching strategies, and student background knowledge.