Many MBAs who ventured into the “.com” world of the late 1990s found themselves unemployed by 2001 as many firms in that industry ceased to exist. However, during their tenure with these companies, these managers gained valuable skills in how to operate within a highly competitive environment. Based on the numbers in the Table below, which industries represent the best match for these managers’ expertise? Looking at theindustries listed in Table, what factors give rise to the varying levels of market power? Table 7-3Market and Representative Firm Demand Elasticities and Corresponding RothschildIndexes for Selected U.S. IndustriesOwn Price Elasticityof Demand forRepresentativeFirm's ProductOwn Price Elasticityof Market DemandIndustryRothschild IndexFood-1.0-3.80.26Tobacco-1.3-1.31.00Textiles-1.5-4.70.32Аpparel-1.1-4.10.27Paper-1.5-1.70.88Printing and publishing-1.8-3.20.56Chemicals-1.5-1.51.00Petroleum-1.5-1.70.88Rubber-1.8-2.30.78Leather-1.2-2.30.52SouRcE: Matthew D. Shapiro, "Measuring Market Power in US. Industry." National Bureau of Economic Research, Working Paper No. 2212, 1987.

After, all the manager earns valuable skills in how well the firm operates with a combative…

Own Price Elasticity of Demand for Own Price Elasticity of Market Demand Representative Firm's Product Industry mod bacco Rothschild Index -1.0 -3.8 0.26 -1.3 -1.3 1.00 xtiles -1.5 -4.7 0.32 oparel mper -1.1 -4.1 0.27 -1.5 -1.7 0.88 inting and publishing -1.8 -3.2 0.56 -1.5 nemicals etroleum -1.5 1.00 -1.5 -1.7 0.88 abber -18 -2.3 0.78 sather -12 -2.3 0.52 CE Mathew D. Shapiro, "Measuring Market Power in US. Industry." National Bureau of Economic Research, Working Paper No. 2212, 187.

Own Price Elasticity of Demand for Own Price Elasticity of Market Demand Representative Firm's Product Industry mod bacco Rothschild Index -1.0 -3.8 0.26 -1.3 -1.3 1.00 xtiles -1.5 -4.7 0.32 oparel mper -1.1 -4.1 0.27 -1.5 -1.7 0.88 inting and publishing -1.8 -3.2 0.56 -1.5 nemicals etroleum -1.5 1.00 -1.5 -1.7 0.88 abber -18 -2.3 0.78 sather -12 -2.3 0.52 CE Mathew D. Shapiro, "Measuring Market Power in US. Industry." National Bureau of Economic Research, Working Paper No. 2212, 187.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 1E: The Potomac Range Corporation manufactures a line of microwave ovens costing $500 each. Its sales...

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