Question 1

Price increases while sales decrease for Firm J. Provide the following information: 1) whether it was the demand line or supply line that shifted in the demand and supply diagram, 2) whether that line shifted left or right, and 3) and a story about Firm J that explains why that curve shifted the way it did.

Question 2

Company X has seen a sharp decline in Return on Equity. Briefly explain how ratio analysis (or DuPont analysis) can be used to investigate the source of this decline.

Question 3

Company X produces a product, GlueX3, that Company X sales for $5. An opportunity presents itself to reallocate its manufacturing facility and related resources to produce Epoxy10. It believes it can sell Epoxy10 for $8. Explain how this switch creates "value". Be sure to include for whom.

Question 4

In normal circumstances the airline industry creates value, a portion of which the airlines capture for themselves. Explain what we mean by value capture and how increased competition in the industry might impact the ability of airlines to capture value.