The profitability of the leading cola syrup manufacturers PepsiCo and Coca-Cola and of the bottlers in the cola business is very different. PepsiCo and Coca-Cola enjoy an 81 percent operating profit as a percentage of sales; bottlers experience only a 15 percent operating profit as a percentage of sales. Which of the following statements explains why the cola syrup manufacturing business is potentially so profitable relative to the bottling business? Check all that apply. High capital costs mean that the bottling industry has considerable barriers to entry. PepsiCo and Coca-Cola together make up the great majority of the market. Bottlers have unique suppliers (Pepsi and Coke) while the manufacturers buy their inputs from numerous vendors.

The profitability of the leading cola syrup manufacturers PepsiCo and Coca-Cola and of the bottlers in the cola business is very different. PepsiCo and Coca-Cola enjoy an 81 percent operating profit as a percentage of sales; bottlers experience only a 15 percent operating profit as a percentage of sales. Which of the following statements explains why the cola syrup manufacturing business is potentially so profitable relative to the bottling business? Check all that apply. High capital costs mean that the bottling industry has considerable barriers to entry. PepsiCo and Coca-Cola together make up the great majority of the market. Bottlers have unique suppliers (Pepsi and Coke) while the manufacturers buy their inputs from numerous vendors.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

When Apple Inc. decided to open another branch/store/outlet or presence in a totally different market or industry. Include the below in your discussion: a) The implication of labor and capital costs, changes in the cost of labor or capital on their business in the new market or industry b) How will an excess benefit from their production affect how much of the product or service they will produce c) The implication of MRTS and economies of scale on their business venture d) The impact of the availability of substitutes to the production e) The possible effects of the type of industry and competitiveness within it on their business operations.
Please no written by hand Lyft's Business Strategy Proposal What is Lyft's most important strategic issue, and why is this important? What is the recommended business-level strategy for Lyft, and how can this address the most important strategic issue discussed above? How can it be implemented within the company (e.g., estimated costs, necessary changes, etc.) How can this implementation impact Lyft's future (e.g., increase market share or profit, reduce further loss, regain competitive advantage, etc.) **Include the resources' links.
If most firms in an industry are earning a 7 percent rate of return on their assets, but your business is earning 9 percent, your rate of economic profit is minus 2 percent. 2 percent. 9 percent. 16 percent.
Note: strictly follow the formula
Solve within 1 hour to upvote
Explain what is meant by a perfect competitor has no market power as applied to power system economics.
Last year Bill Bailey quit his $20,000 per year job and invested $200,000 to open the Bargain Bonanzas. This year he sold for $600,000 merchandise he bought for $400,000. He paid his sales clerks $50,000. Bill could have earned 10 percent interest on other investments. This year, Bill’s: accounting and economic profit were both $150,000 economic loss was $70,000 economic profit was $110,000 economic profit was $220,000 less than his accounting profit
The following data describe the firm's monthly demand and monthly costs for a manufacturer of electronic components. 1. Complete the following cost and revenue schedules for this company. Total Average Marginal Marginal Cost per Variable Variable Average Price per Cost per Total Cost Revenue per Cost for Quantity of boxes of per box of box of 1000 units Total box of 1000 box of units Fixed Total box of Revenue units 1000 units 1000 units produced Cost Cost 1000 units 1000 units $0 $800 $800 $1,700 $1,575 $1,450 $1,325 1 $1,028 $1,074 $1,117 $1,184 $1,303 2 3 4 5 $1,200 6. $1,075 $950 $1,498 7 $1,753 8 $825 $2,103 (a) What is the profit maximizing (or loss minimizing) quantity of boxesthat this company should supply? Why? (b) What price will the company charge? How is this price determined? Will this result in economic profits? (c) If the company charged a higher price than what you found in (b) above, what would happen? (d) What market structure do you think this company participates…
D6) Outline and critically assess the theory of perfect competition. To what extent does the theory provide useful guidance to: (i) business owners, and (ii) government policy makers interested in maximising consumer welfare?
Complete the table (fill up the FC, compute for TC, MC, AC, AFC and AVC):
Distinguish between a plant, a firm, and industry. Contrast a vertically integrated firm, a horizontally intergrated firm, and a conglomerate. Cite and example of a horizontally intergrated firm from which you have recently made purchase.
Wyandotte Chemical Company sells various chemicals to the automobile industry. Wyandotte currently sells 30,000 gallons of polyol per year at an average price of $15 per gallon. Fixed costs of manufacturing polyol are $90,000 per year and total variable costs equal $180,000. The operations research department has estimated that a 15 percent increase in output would not affect fixed costs but would reduce average variable costs by 60 cents per gallon. The marketing department has estimated the arc elasticity of demand for polyol to be –2.0.a. How much would Wyandotte have to reduce the price of polyol to achieve a 15 percent increase in the quantity sold?b. Evaluate the impact of such a price cut on (i) total revenue, (ii) total costs, and (iii) total profits.