From a business practitioner perspective, the true role and value of of the marketing department is that good marketers tend to discover the unmet needs of the firm's targeted consumer segments, and then, disseminate that information across all firm departments. So marketing oriented firms are those that take this information and then use it to develop various marketing mixes (of goods and services) that the firm then markets to it's various target segment (in that hope that each 4-P mix will satisfy their target segment needs). A True False

From a business practitioner perspective, the true role and value of of the marketing department is that good marketers tend to discover the unmet needs of the firm's targeted consumer segments, and then, disseminate that information across all firm departments. So marketing oriented firms are those that take this information and then use it to develop various marketing mixes (of goods and services) that the firm then markets to it's various target segment (in that hope that each 4-P mix will satisfy their target segment needs). A True False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Figure 14-2 Xenophone (X Decleion Offer Cable or DSL a service Cable OSL Gigom (0) Decision 图 Offer Cable or DSL service Gigsom (G) Decon Ofer Cable or D Went service Cable DS Cable DSL X 80 million G: 19 milion X: 54 milion G: $45 milion x 55 million G: 16.5 milion X: 50 milion $7 The government of a developing country plans to award two firms, Gigacom and Xenophone, the exclusive rights to share the market for high speed internet service. Gigacom and Xenophone can both provide the service either via television cable lines or via direct subscriber line (DSL). Suppose the government is considering a proposal to delay one firm's entry into the market on the grounds that it wants to prevent "harmful" competition. Figure 14-2 shows the decision tree for this game. Refer to Figure 14-2. Now suppose that the government delays Xenophone's entry and Gigacom moves first, what is the likely outcome in the market? Both offer internet service via cable line: Xenophone earns a profit of $6 million…
You are the mayor of your hometown, and one day you arrive at city hall to find angry voters demonstrating against you. They are mad because your office created a garbage collection monopoly by awarding only one company a permit to collect garbage in your town. The voters claim that the company is overcharging and providing poor service. They want you to do something that will lower rates and improve service. You call your staff economst, who presents evidence that there are substantial economies of scale to garbage collection. What are your options if you are interested in efficiency?
Suppose the European Union (EU) was investigated and proposed a merger between two of the largest distillers of premium Scotch liquor. Based on some economists’ definition of the relevant market, the two firms proposing to merge enjoyed a combined market share of about two-thirds, while another firm essentially controlled the remaining share of the market. Additionally, suppose that the (wholesale) market elasticity of demand for Scotch liquor is −1.4 and that it costs $15.90 to produce and distribute each liter of Scotch. Based only on these data, provide quantitative estimates of the likely pre- and postmerger prices in the wholesale market for premium Scotch liquor. Instructions: Do not round intermediate calculations. Enter your final responses rounded to the nearest penny (two decimal places). Pre-merger price: $ Post-merger price: $
In the late 1990s, Vanguard Airlines operated as a low-cost carrier, offering low prices and limited services, out of Kansas City, Missouri. Not long after its inception, Vanguard began offering a significant number of flights based out of Midway International Airport in Chicago, Illinois, as well. When Vanguard expanded to Midway, incumbent airlines, such as Delta, quickly responded to its low fares by offering many competing flights at comparably low prices. The intense price competition ultimately caused Vanguard to exit Midway in 2000 and file for bankruptcy in 2002. At varying points in time, the airline industry has been described as a contestable market; does the example of Vanguard support or refute this characterization of the airline industry? Explain
As the manager of Smith Construction, you need to make a decision on the number of homes to build in a new residential area where you are the only builder. Unfortunately, you must build the homes before you learn how strong demand is for homes in this large neighborhood. There is a 60 percent chance of low demand and a 40 percent chance of high demand. The corresponding (inverse) demand functions for these two scenarios are P = 400,000 −400Q and P = 900,000 −250Q, respectively. Your cost function is C(Q) = 125,000 + 430,000Q. How many new homes should you build, and what profits can you expect? Number of homes you should build: homes Profits you can expect: $
U.S. fast‑food chains often alter their menus or business practices to accommodate local tastes and customs when operating in other countries. One reason for this may be that U.S. companies do not want to go against cultural norms or offend their customers when operating overseas. To a certain extent, U.S. companies wish to fit in to the cultures where they are selling their products. Given this, consider why they do not simply offer the exact same menu items offered by local competitors in each market that they serve. a. Some degree of product differentiation is necessary to a.open a business in a foreign country. b.anticipate the actions of competing firms. c.gain market share. d.avoid a Prisoner’s Dilemma. b. From the perspective of the consumer, product differentiation has a.benefits but no costs b.both benefits and costs c.costs but no benefits d.no benefits and no costs .
Suppose you’re relatively new in business and want to launch your product in the market.You have a great deal of flexibility in how you set your prices, you may want to considerpricing for optimum market penetration. This means that you initially sell your product ata low introductory price P0 (say) to attract new customers, then raise prices once you’vesecured your share in the market. Determining the most appropriate pricing model for yourbusiness is tricky and takes considerable research.If it is known that change in price P depends upon the demand D and Supply S of yourproduct, where both D and S are linearly related to price P.(a) Write the differential equation the describes the change in price.(b) Describe the pattern of change of price for different phases.(c) For what values of parameter, you have equilibrium price (Hint: Recall equilibriumsolution of differential equations)
Jims diner is just about to open in memphis, tennessee. however, jim is trying to decide whether he wants to offer coke or pepsi soda products. he determines that, to offer either product, he will have to spend $1500 in sunk costs to purchase and install the appropriate paraphernalia. Ultimately, he chooses to offer coke products and agrees to pay coke 5 cents per ounce of coke sold for the right to use its product. After jim makes the investments specific to his soda choice, coke returns and asks for a fixed (One-time) fee in addition to 5 cents per ounce. What is the most jim should be willing to pay? explain
(4) Firm l's cost function is C1(q1) = q1 and firm 2's cost function is C2(q2) = 2q2. Consider a duopoly selling in a market with inverse demand function p = 12 q. (a) Assume firms choose output simultaneously (Cournot model). Compute the equilibrium quantities and the market price in a Nash equilibrium. (b) Now assume that firm 1 is a leader and chooses its output q1 first. Then, firm 2 chooses its output q2 after observing q1 (Stackelberg model). Find a subgame-perfect Nash equilibrium of this game. Carefully specify the strategies for firm 1 and firm 2. What quantities are produced in equilibrium and what is the market price in equilibrium?
Consider the following oligopolistic market. In the first stage, Firm 1 chooses quantity q1₁. Firms 2 and 3 observe Firm 1's choice, and then proceed to simultaneously choose 92 and 93, respectively. Market demand is given by p(Q) = 100 – · Q, and Q = 9₁ +92 +93. Firm 1's costs are c₁ (9₁) = 591, firm 2's costs are c₂ (92) = 492 and firm 3's costs are C3 (93) = 493. C2 Starting from the end of the game, you can express Firm 2's best response function in terms of 9₁ and 93, and you can similarly express Firm 3's best response function in terms of 9₁ and 92. Using these, answer the following questions. If rounding is needed, write your answers to 3 decimal places. a) If Firm 1 chooses q₁ = 3, what quantity will Firm 2 choose? b) If Firm 1 chooses 9₁ = 100, what quantity will Firm 2 choose? c) In the subgame perfect Nash equilibrium of this game, firm 1 produces what quantity? d) In the subgame perfect Nash equilibrium of this game, firm 2 and firm 3 each produce what quantity?
A firm sells its product to two groups of buyers: daytime buyers and nighttime buyers. There are 50 daytime buyers, all of whom have identical demands given by DD in the figure. There are 50 nighttime buyers, all of whom have identical demands given by DN in the figure. The firm's variable costs are constant (SMC = AVC = $12) and its total fixed cost is $250,000. The marketing director must devise a two-part pricing plan that will maximize the firm's profit. Price and cost ($ per unit) 100 12 0 Do: PD 100 -0.5Q, Multiple Choice Quantity Panel A - One Daytime buyer's demand A* = $1,472 A* = $2,178 A* = $3,872 SMC = AVC A* = $4,356 200 A* = $7,744 100 Assuming both daytime and nighttime markets are served, the optimal fixed access charge (4*) is 0 DN: PN 100 - QN SMC=AVC 100 Quantity Panel B - One Nighttime buyer's demand
Suppose Mattel, the producer of Barble dolls and accessorles (sold separately), has two types of consumers who purchase Its dolls: low-value consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay of $44. Each of the high-value consumers buys one doll and two accessorles and Is willing to pay $82 In total. Mattel Is currently considering two pricing strategles: • Strategy 1: Sell each doll for $22 and each accessory for $22 • Strategy 2: Sell each doll for $6 and each accessory for $38 In the following table, Indicate the revenue for a low-value and a high-value customer under strategy I and strategy 2. Then, assuming each strategy is applied to one low-value and one high-value customer, indicate the total revenue for each strategy. Revenue from Low-Value Revenue from High-Value Total Revenue from Customers Customers Strategy $44 Value, 1 Accessory S82 Value, 2 Accessories (s) ($) (s) Strategy 1…