Monopoly and Fair Return

Net Sales – totaled $4,485,000.00 for year 6, and grew +33.3% or $1,495,000.00 between years 6 to 7.

For centuries, diamonds have been regarded as one of the most valuable commodities in the world and the industry has evolved into billions of dollars. At the top, De Beers dominated the entire industry worldwide, from exploration to retail selling. However, it has a reputation of a monopolist, where it influences supply and demand. The two critical factors that De Beers carefully maintained throughout the century to remain in monopoly was to create the illusion of the scarcity of the diamonds and to keep the prices high. Realizing the benefits of the cooperation and the dangers of the oversupply, most

Both potential and existing competitors influence average industry profitability. The threat of new entrants is usually based on the market entry barriers. They can take diverse forms and are used to prevent an influx of firms into an industry whenever profits, adjusted for the cost of capital, rise above zero. In contrast, entry barriers exist whenever it is difficult or not economically feasible for an outsider to replicate the incumbents’ position (Porter, 1980b; Sanderson, 1998) The most common forms of entry barriers, except intrinsic physical or legal obstacles, are as follows:

15. In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is ( )

$155M is the net revenue (profilt) per year which was found by dividing total revenue value of $1.2375B by 8 (i.e. $1.2375B/8)

Actual sales = 1686 (in million €) and Break even sales = 1126.61(in million €)

Total Sales Dollars (for covering each incremental dollar of advertising) = $200,000 / $150,000 = $1.33

Sales took the most percentage of total revenue. The revenue of sales increased gradually from $ 214,934 (in thousands) in 2010 to $ 260,832 in 2012 while the figure of royalties reduced gradually from $ 873 in 2010 to $ 681 in 2012 (in thousands). The revenue of other income increased from $ 1,286 to $ 1,325 during this period and then the figure decreased dramatically to $ 533 in the financial year 2012. In addition, in the financial year 2012, a new resource of revenue called membership was developed with the figure of $54.

Revenue: (205 hours x $400) + (97 hours x $1,000) = $82,000 + $97,000 = $179,000

The revenue is $600,600*1.2= $720,720. The variable cost changes as sales increases and fixed cost stays the same, the gross profit is $175,500. After tax, the net income is $100,557.

10. Fixed asset turnover = Total Revenues in Statement of Operations / Net Property and

Market entry risks such as cultural differences, competitors, legislation, transportation issues, infringement of intellectual property rights and copyright.

Profit= 42360,739 + 1703,305 MTenure -4,57 MTenureSquared+ 3780,703 CTenure - 60,526 CTenureSquared + 3,997 Pop - 26561,276 Comp + 18091,05 Visibility + 36639,014 PedCount+ 58429,513

net sales: $1,000,000 cost of goods sold: $700,000 rent: $20,000 wages: $100,000 other operating expenses: $50,000 net sales – all operating expenses = 530,000

(500,000) 1,215,153 1,308,558 1,379,154 248,357 257,664 262,899 $ 668,334 $ 719,707 $ 758,535 $ 136,596 50,000 134,271 46,500 98,000 120,000 50,000 635,367.52 32,966.63 6,191.88 26,774.75 73,275 (426,725) (432,153) 141,715 146,478 46,500 98,000 120,000 552,693.02 167,013.88 31,369.01 135,644.87 182,145 (244,580) (275,993) 144,595 146,478 46,500 98,000 120,000 555,572.33 202,962.18 38,120.92