Assignment:
I. Relative to managers in more monopolistic industries, are managers in competitive industries more likely to spend their time on reducing costs or on pricing strategies? Explain.
II. Describe the differences between the way a "society" (i.e. government and/or consumers) and a businessperson might view a monopolist.
III. If demand for Nike running shoes is inelastic, should Nike raise or lower price? Explain.
IV. Based upon the required reading, "The Cost of Gas: How Two Stations Set Their Prices" (USA Today, May 23, 2008), answer the following questions.
1) Suppose Steve Kehler calls his gasoline supplier to order a new shipment and discovers the wholesale price has dropped by three cents. Should Kehler adjust the price he charges to his customers?
2) Suppose a neighboring station cuts its price. How will this a?ect Kehler's demand?
3) How should Kehler adjust his price as a result of the neighbor's price cut?
V. Look at the websites on ski ticket pricing ( https://www.snowbird.com/ and https://sportsden.com/discount-ski-lift-tickets/). Answer the following questions.
1) How much less do seniors pay for a one-day pass compared to other adults? (Do this comparison assuming both buy on the mountain.) Why?
2) Snowbird lists a lot of prices on its web site, but doesn't list the price shown on the Sports Den site. Why might Snowbird o?er such a lower price through Sports Den?