A1 High Rivalry

For each category, indicate which condition is associated with higher rivalry among competitors.

Number of firms High Low

Fixed costs High Low

Level of product differentiation High Low

Industry growth High Low

Buyer switching costs High Low

A2 Increasing Customer Value

To increase a company's performance, a manager suggests that the company needs to increase the value of its product to customers. Describe three ways in which this advice might be incorrect (Hint: Think about what else might or might not change that affects profit.)

A3 Salons and Teeth Whitening

Salon owners have recently started offering teeth whitening services to clients in addition to their more standard services. In a number of states, regulators have ordered the salon owners to stop, claiming that this service constitutes the practice of illegal dentistry. What group would you expect to be behind the state's efforts to ban salons from providing teeth whitening services? Why?

B1 Explain the Peso Devaluation

In August 2008, Mexican pesos were trading at $0.10 on the foreign exchange market. By November, they were down to $0.07, a decline of 30%. Explain the fall in the price of a peso using supply and demand curves. In words, explain the equivalent rise in the price of a dollar.

B2 Flight to Safety

As stock markets have crashed, and uncertainty has increased, consumers move their money to the safest currencies and countries in the world. Predict the effects of an increase in uncertainty on GBP/USD exchange rates.

B3 The Russian Ruble

a. In February 2014, hostilities escalated between Russia and Ukraine over Crimea. Predict the effects of these hostilities on the exchange rate between the U.S dollar and the Russian ruble.

b. In March, an article in the Moscow Times reported: "The currency declined further in Monday trading, but a ruble that is losing value is a great prop for struggling local manufacturers, which now find themselves more competitive with Western imports." Explain the logic behind this statement using demand and supply curves.

C1 Parking at Cowboys Stadium

What would efficient revenue management imply for the pricing of the Cowboys Stadium parking lot on typical game days? How about for the Super Bowl? How about for the many smaller events that fill less than half the lot?

C2 Macintosh Versus iPhone

When the Macintosh computer was introduced in 1982, Apple made it difficult for third party software developers to develop software for the platform. In contrast, Apple made it relatively easy for third party developers to make applications that ran on the iPhone when it was introduced in 2007. Compare and contrast these two strategies.

C3 Radio Stations and Rock Concerts

In 2005, Clear Channel (an owner of multiple popular radio stations) spun off concert promoter Live Nation into an independent company. How would this affect prices for concert tickets or rates for radio programming?