Question: Your former college roommate calls you and asks to borrow
Your former college roommate calls you and asks to borrow $10,000 so that he can open a pizza restaurant in his hometown. In justifying this request, he argues that there must be significant demand for pizza and other fast food in his hometown because there are lots of such restaurants already there and three or four new ones are opening each month. He also argues that demand for convenience food will continue to increase and he points to the large number of firms that now sell frozen dinners in grocery stores. What are the risks involved in choosing to lend him money?
Relevant QuestionsOne potential threat in an industry is buyers’ influence. Yet unless buyers are satisfied, they are likely to look for satisfaction elsewhere. Can the fact that buyers can be threats be reconciled with the need to satisfy ...Describe when the evolution of industry structure from an emerging industry to a mature industry to a declining industry is inevitable. Your former college roommate calls you and asks to borrow $10,000 so the he can open a pizza restaurant in his hometown. He acknowledges that there is a high degree of direct competition in this market, that the cost of ...When economies of scale exist, firms with large volumes of production will have lower costs than firms with smaller volumes of production. The realization of these economies of scale, however, is far from automatic. What ...Chamberlin used the term “monopolistic competition” to describe firms pursuing a product differentiation strategy in a competitive industry. However, it is usually the case that firms that operate in monopolies are less ...
Post your question