3.8. PROFIT MAXIMIZATION. Explain not reasonable? 3.9. CAR PARTS. Two parts in an automobile taillight are the plastic exterior cover and the light bulb. Which of these parts is a car company more likely to manufacture in-house? Why? 3.10. JET ENGINES. There are three main suppliers of commercial jet engines, Pratt & Whitney, General Electric, and Rolls-Royce. All three maintain extensive support staff at major (and many minor) airports throughout the world. Why doesn't one firm service each airport? Why do all three feel they need to provide service and support operations worldwide themselves? Why don't they subcontract this work? Why don't they leave it entirely to the airlines? 3.11. SMART CAR. The Smart car was created as a joint venture between Daimler-Benz AG and Swatch Group AG. Although Micro Compact Car AG (the name of the joint venture) was originally jointly owned, in November of 1998 Daimler-Benz AG took complete control by buying Swatch's share. ¹2 The deal put an end to a very stressed relationship between Daimler and Swatch. What does Section 3.4 suggest as to what the sources of strain might have been? [star a noiel-O-aal ei isd 3.12. FRANCHISE RETAILING. Empirical evidence from franchise retailing suggests that even when stores have similar characteristics, the mother company resorts to a mix between company-owned stores and franchised ones. ¹3 How can this be justified? 13
3.8. PROFIT MAXIMIZATION. Explain not reasonable? 3.9. CAR PARTS. Two parts in an automobile taillight are the plastic exterior cover and the light bulb. Which of these parts is a car company more likely to manufacture in-house? Why? 3.10. JET ENGINES. There are three main suppliers of commercial jet engines, Pratt & Whitney, General Electric, and Rolls-Royce. All three maintain extensive support staff at major (and many minor) airports throughout the world. Why doesn't one firm service each airport? Why do all three feel they need to provide service and support operations worldwide themselves? Why don't they subcontract this work? Why don't they leave it entirely to the airlines? 3.11. SMART CAR. The Smart car was created as a joint venture between Daimler-Benz AG and Swatch Group AG. Although Micro Compact Car AG (the name of the joint venture) was originally jointly owned, in November of 1998 Daimler-Benz AG took complete control by buying Swatch's share. ¹2 The deal put an end to a very stressed relationship between Daimler and Swatch. What does Section 3.4 suggest as to what the sources of strain might have been? [star a noiel-O-aal ei isd 3.12. FRANCHISE RETAILING. Empirical evidence from franchise retailing suggests that even when stores have similar characteristics, the mother company resorts to a mix between company-owned stores and franchised ones. ¹3 How can this be justified? 13
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
It is question 3.11 Smart Car
Transcribed Image Text:3.8. PROFIT MAXIMIZATION. Explain
not reasonable?
3.9. CAR PARTS. Two parts in an automobile taillight are the plastic exterior cover
and the light bulb. Which of these parts is a car company more likely to manufacture
in-house? Why?
3.10. JET ENGINES. There are three main suppliers of commercial jet engines, Pratt &
Whitney, General Electric, and Rolls-Royce. All three maintain extensive support staff
at major (and many minor) airports throughout the world. Why doesn't one firm service
each airport? Why do all three feel they need to provide service and support operations
worldwide themselves? Why don't they subcontract this work? Why don't they leave it
entirely to the airlines?
3.11. SMART CAR. The Smart car was created as a joint venture between Daimler-Benz
AG and Swatch Group AG. Although Micro Compact Car AG (the name of the joint
venture) was originally jointly owned, in November of 1998 Daimler-Benz AG took
complete control by buying Swatch's share. ¹2 The deal put an end to a very stressed
relationship between Daimler and Swatch. What does Section 3.4 suggest as to what the
sources of strain might have been?
de noiel7-0-aal el ism
3.12. FRANCHISE RETAILING. Empirical evidence from franchise retailing suggests that
even when stores have similar characteristics, the mother company resorts to a mix
between company-owned stores and franchised ones. 13 How can this be justified?
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