which of the following is not among porter's competitive forces? changing consumer tastes power of buyers threat of new entrants power of suppliers
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which of the following is not among porter's competitive forces?
changing consumer tastes
power of buyers
threat of new entrants
power of suppliers
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- Profit is the incentive that drives our market economy. Firms make production, pricing, and hiring decisions based on their quest for profit. But what happens when a firm discovers that it can make dramatically higher profits by stopping production altogether? In December 2000, due to wild swings in the market for electricity, Kaiser Aluminium faced just such a decision. Kaiser Aluminium had contracted with Bonneville power for all of its electricity needs and found itself in the unique position of being an electricity consumer and, potentially, an electricity reseller. By December 2000, Kaiser faced a difficult decision of continuing its current aluminium production and profit levels, or closing the plant to dramatically increase its profit by simply reselling its electricity. When making production decisions, firms must consider both their costs and revenues. One important concern for many firms is utility costs. In 1996, Kaiser Aluminium Corporation in Spokane, Washington, entered…The golden rule of profit maximization states that any firm maximizes profit by producing where:Which of the following are characteristics of the perfectly competitive market model? buyers and sellers are vastly numerous there are barriers to entry goods are differentiated by brand names all firms use identical technologies
- Explain why the equilibrium of the Bertrand model is a Nash equilibrium.According to the Hanson Production: Pricing for Opening Day Case Study by Peter Famiglietti, How would pricing based on the competition work in this situation?For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. Select the matching entry for each dropdown box in the following table. Scenario Number of Firms Type of Product Market Model There are hundreds of colleges and universities that serve millions of college students each year. The colleges vary by location, size, and educational quality, which allows students with diverse preferences to find schools that match their needs. There are hundreds of high school students in need of algebra tutoring services. Dozens of companies offer tutoring services; parents view the quality of the tutoring at the different companies to be largely the same. In a small town, there are four providers of broadband Internet access: a cable company, the phone company, and two satellite companies. The Internet access offered by all four providers is of the same speed. Almost…
- Suppose you are working as the CEO of an airline. One of your airline's wide-body aircraft operates in a two-class configuration with 500 economy seats and 200 business seats. On the routes the wide-body aircraft flies, the airline's marginal cost per passenger is $1,000 in economy and $1,500 in business. According to the airline's internal data, the willingness to pay (WTP) of leisure pax for economy travel is $2,000, while their WTP for business travel is $2,500. On the other hand, business pax' WTP for economy travel is $4,500, while their WTP for business travel is $10,000. Finally, airlines charge different fares for economy and business, and there are more pax with WTP's as specified above than the number of seats in each class. The maximum certified capacity for this widebody aircraft is 500 seats in economy, so the airline cannot increase the number of seats in this class any further. But if airlines deliberately degrade service in economy even further (e.g. by offering less…You are the manager of an international firm headquartered in Antarctica. You are contemplating a business tactic that will permit your firm to raise prices and increase profits in the long run by eliminating one of your competitors. Do you think it would make economic sense to expend resources on legal counsel before implementing your strategy? ExplainAssuming the blankets in this market are considered identical by consumers, how much profit will a perfect competitor earn? Enter your answer as a whole number without a dollar sign.
- How would you explain allocative efficiency in a purely competitive market structure? Group of answer choices Firms produce the quantity where the price consumers pay is less than the cost to society to produce it. Firms produce that quantity where the price consumers pay equals the cost to society to produce it. Allocative efficiency is a concept involving only two goods, so it cannot be applied to a perfectly competitive market.. Firms ensure that they produce enough quantity so that everyone who wishes to buy the product can do so.How satisfying the assumptions of perfect competition and partial equilibrium makes it impossible to derive an upward sloping supply curve?Suppose there are 1,000 hot pretzel stands operating in New York City. Each stand has the usual U-shaped average-total-cost curve. The market demand curve for pretzels slopes downward and the market for pretzels is in long-run competitive equilibrium. Draw the current equilibrium, using graphs for the entire market and for an individual pretzel stand. Now the city decides to restrict the number of pretzel-stand licenses, reducing the number of stands to only 800. What effect will this action have on the market and on an individual stand that is still operating? Use graphs to illustrate your answer. Suppose that the city decides to charge a license fee for the 800 licenses. How will this affect the number of pretzels sold by an individual stand, and the stand’s profit? The city wants to raise as much revenue as possible and also wants to ensure that 800 pretzel stands remain in the city. By how much should the city increase the license fee? Show the answer on your graph.
