MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
9th Edition
ISBN: 2810022149537
Author: Baye
Publisher: MCG
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Question
Chapter 7, Problem 23PAA
To determine
To know: The impact on Rothschild index for cellular service industry.
Introduction:
Rothschild index measure the relative
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Please type your NUMERICAL answer in the space below. ENTER ONLY THE NUMBER. IF answers are in decimals,
please round the number to one decimal point.
Winterfell Cable TV pays $100,000 per year to earn exclusive rights to air a premium sports channel. There are two types
of subscribers in Winterfell: 3,000 die-hard sports fans who will pay as much as $200 a year for the new channel and
20,000 occasional sports viewers who will pay as much as $25 a year for a subscription to it.
a)
If Winterfell Cable is unable to price discriminate, what price will it charge and how much are its profits?
Price
Profits=
b)
If Winterfell Cable is able to price discriminate, how much will it make in profits?
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c)
discriminating policy?
DWL=
Not long ago, the Federal Communications Commission (FCC) implemented “local number portability” rules allowing cellular phone consumers to switch cellular providers within the same geographic area and maintain the same phone number. How would you expect this change to affect the Rothschild index for the cellular service industry?
The mobile phone landscape looks drastically different today than it did three decades ago. In 1983,
Motorola accounted for seventy five percent of the mobile phone market. But by 2021, its market share
had shrunk to just 2.2%. How did this happen, and how has the mobile industry changed over the last 30
years?
In 1983, Motorola launched one of the world's first commercially available mobile phones-the DynaTAC
8000X. Motorola went on to launch a few more devices over the next few years and quickly became a
dominant player in the emerging industry. In the early days of the market, the company's only serious
competitor was Finnish multinational Nokia.
By the mid-1990s, other competitors like Sony and Siemens started to gain some solid footing, which
chipped away at Motorola's dominance. In September 1995, the company's market share was down to
32.1%. By January 1999, Nokia surpassed Motorola as the leading mobile phone manufacturer,
accounting for 21.4% of global market share. That put…
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