MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
9th Edition
ISBN: 2810022149537
Author: Baye
Publisher: MCG
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Chapter 13, Problem 20PAA
To determine
To find: The benefit to the customers.
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Bank 1 and Bank 2 are considering entering a compatibility agreement that would permit the users of each bank’s automated teller machines (ATMs) access to the other bank’s ATMs. Bank 1 has a network of branches and ATMs extending from the U.S. to Mexico. Bank 1’s 12 million customers currently have access only to the 10,000 ATMs solely owned by the company on the U.S. While Bank 2’s core account holders are located in Mexico and southwestern portion of the United States, the company is expanding across the United States. Bank 2 has 15 million customers who can use any of its 14,000 ATMs.
Using the idea of network externalities, describe how such an agreement between Bank 1 and Bank 2 would benefit consumers.
What is the business rationale for such a strategy between Bank 1 and Bank 2?
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and he is planning to partner with a foreign TV network,
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You are about to go live with a Latin music download service that will compete head-to-head with Apple's iTunes®. You will be selling digital albums of regional (Mexican/Tejano) music for $5 each, pop/rock albums for $4 each, and tropical (salsa/merengue/cumbia/bachata) for $6 each. Your servers can handle up to 33,000 downloaded albums per day, and you anticipate on the basis of national sales, revenues from regional music will be at least five times those from tropical music. You also anticipate that you will sell at least 19,000 pop/rock albums per day as a result of the very attractive $4 price. On the basis of these assumptions, how many of each type of album should you sell for a maximum daily revenue?
regional music albumspop/rock music albumstropical music albums
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Chapter 13 Solutions
MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
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