If the company hires an incompetent president to run the company. He has the opportunity to introduce his idea for kids' toys but his idea failed. He keeps reducing the price of the products and eventually gives out free products. As a result, the sales go down along with the stock price that leads to a takeover target by other companies. Supply was more than demand. Later, the company decided to give out free samples or products, people start noticing and start using the toys. As a result, demand for toys is up and so the price increase. Is it a good idea to give free products to attract more sales or more demand?
1. Select a concept associated with Supply and Demand that is illustrated in this case
2. Use the information we're given to support an economic analysis or to explain the behavior of the concept you selected
3. Be sure to explain the supply and demand concept you selected being careful to distinguish between a change in quantity demanded or supplied (movement along the curve) versus a change in demand or supply (shift of the curve) and how it applies to the particular segment you are analyzing.
Please explain your answer in detail and clearly
If the company hires an incompetent president to run the company. He has the opportunity to introduce his idea for kids' toys but his idea failed. He keeps reducing the price of the products and eventually gives out free products. As a result, the sales go down along with the stock price that leads to a takeover target by other companies. Supply was more than demand. Later, the company decided to give out free samples or products, people start noticing and start using the toys. As a result, demand for toys is up and so the price increase. Is it a good idea to give free products to attract more sales or more demand?
1. Select a concept associated with Supply and Demand that is illustrated in this case
2. Use the information we're given to support an economic analysis or to explain the behavior of the concept you selected
3. Be sure to explain the supply and demand concept you selected being careful to distinguish between a change in quantity demanded or supplied (movement along the curve) versus a change in demand or supply (shift of the curve) and how it applies to the particular segment you are analyzing.
Please explain your answer in detail and clearly
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Related questions
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Entrepreneurial Collage Entrepreneurs are as varied and unique as their business ideas. They come in all shapes, sizes, ages, and colors. Consider the following collage of entrepreneurs: Ten-year-old Brandon Bozek started his business, Bloominâ Express, when he noticed that the flowers customers bought from the local supermarket wilted after just a day or two. Brandon's fresh-flower subscription service rings up sales of $150 per month, and most of the $75 in profit goes into savings. He telephones his order to a local flower market every Tuesday morning. On Thursday, with the help of his âsteering wheel consultants (his parents), Brandon delivers the floral orders to his customers. Gerald Levinson's radio was stolen from his car three times despite the car alarm and stereo lock he used. Therefore, Levinson found a better way: He designed a stolen fake radio that fits over the radio to make it look as if it has already been stolen. The unit is very convincing complete with loose wires and cracked plastic. Mary Anne Jackson, a former executive at Beatrice Foods, went out on her own to start the first prepackaged food company aiming its products at kids. Her company, My Own Meals, generates more than $5 million in sales. All I had when I started was an idea for a product and a prayer, she says. Michael Williams saw an opportunity in an unexploited ethnic niche, a black comedy club. With $1, 000 of his savings, Williams rented a hall and placed an ad in a magazine for black stand-up comedians. Eight local comics performed. The show was a hit and the Comedy Act Theater was born. Today, the club grosses $600, 000 annually, and Williams has opened a second club with plans to open twenty-four more. If you are around kids, chances are that you have heard about the Teenage Mutant Ninja Turtles. The Turtles creators, Kevin Eastman and Peter Laird were struggling artists swapping drawings in their living room in 1983. Eastman sketched a masked upright turtle armed with an oriental weapon. It was a spontaneous thing. I did it to make Peter laugh, Eastman says. Within minutes, the two had created one of the most recognizable sets of heroes in kid-dom. Eastman and Laird launched their own comic book publishing company, and their first black-and-white comics sold rapidly. Soon after, the artist signed a licensing agreement with Playmate Toys for a variety of children's products. The reptilian heroes Leonardo, Donatello, Raphael, and Michelangelo were once the hottest non-electronic toys on the market since Cabbage Patch dolls. Their action toys, movies, cartoons, comic books, and other products generate between %5 million and $15 million in revenues for the two creators. I'm now a businessman instead of an artist observed Eastman. Cowabunga! Sources: Adapted From âKids in Business,â Changing Times, March 1990, pp.96-97; Terri Thompson, âHow Tykes Can Be Tycoons,â US News & World Report, February 19, 1990, pp. 68-69; âFooling the Fools,â Entrepreneur, December 1989, p. 118; Christine Forbes and Erika Kotite, âEntrepreneurs Across America,â Entrepreneur, June 1990 p 96; Wayne Lionel Aponte âHave You Heard the One About the Comedy Club,â Wall Street Journal, October 31, 1990, p. B2; Christopher Geehern, âCowabunga Dude,â Entrepreneur, March 1991, pp. 76-81. |
1. Differentiate the entrepreneur and entrepreneurship. [4 marks]
2. Do these entrepreneurs exhibit entrepreneurial characteristics or competencies? If so, explain. [15 marks]
3. What is the opportunity? Describe the opportunity identification process of at least one of the entrepreneurs in the above article. [6 marks]
4. In your opinion, what contributions do small businesses like these make to the country? [10 marks]
5. The past few years have seen an increase in the number of entrepreneurship or business ownership of Malaysian Bumiputera. Briefly explain the forces that have led to the boom in Bumiputera entrepreneurship in Malaysia (NEP, NDP, NVP, NEM, ETP)? [15 marks]
1. In a market economy, the high salaries of some star baseball players such as Adrian Gonzalez, are determined by
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Team owners, based on the total number of star athletes they plan to hire. |
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advertising companies, based on what they are willing to pay to advertise their products at baseball games. |
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the interaction of the demand for star athletes and the supply of star athletes. |
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consumers, based on their willingness to watch baseball games. |
2. Demand in factor markets differs from demand in product markets in that
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the demand for a factor of production is difficult to determine. |
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the demand for a factor of production is influenced by workers' productivity and by the producers' expected sales revenues, not by tastes and preferences of consumers. |
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demand for a factor of production is based on the tastes and preferences of firms. |
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demand for a factor of production is based on the tastes and preferences of resource owners. |
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3. The demand for labor is described as a derived demand because
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it is derived by workers seeking to earn income to fund the consumption of goods and services. |
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it is derived by producers seeking to make profits by starting new businesses. |
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it is derived from the demand for products that use labor in the production process. |
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it is derived from government institutions that rely on labor markets for the purpose of raising tax revenue. |
4. Which of the following is not an example of a derived demand?
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Several of the animated films released between 1999 and 2001 failed to earn a profit, which caused some companies to stop making these films, thereby decreasing the demand for animators. |
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B |
Seth Bullock, a personal injury attorney, complains that he is earning far less now than a few years ago largely because personal injury cases have been undercut by state laws limiting class-action suits and payouts on damages. |
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C |
Millicent Manning, the owner of a furniture store, is concerned that her sales have fallen for the past six months. She attributes this to the downturn in the real estate market. |
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As advancements in medical technology increase the safety and success of laser eye surgery, the demand for opticians has decreased. |
5. Marginal revenue product for a perfectly competitive seller is equal to
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the output price multiplied by the total product of labor. |
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the output price multiplied by the number of workers hired. |
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the change in total revenue that results from hiring another worker. |
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D |
the marginal cost of production. |
6. What is the difference between labor's marginal product and marginal revenue product?
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The marginal product of labor is the increase in output as a result of hiring an additional worker while the marginal revenue product of labor is the increase in profit as a result of hiring an additional worker. |
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The marginal revenue product of labor is the dollar value of hiring an additional worker while the marginal product of labor is the increase in the firm's physical output as a result of hiring an additional worker. |
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The marginal product of labor is the additional labor's contribution to the firm's total output while the marginal revenue product is the additional labor's contribution to the firm's total sales revenue. |
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Labor's marginal product is a measure of labor's productivity while labor's marginal revenue product is a measure of labor's ability to sell the firm's products. |
7. What is the difference between a firm's marginal revenue and its marginal revenue product?
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Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the profit earned from hiring one more worker. |
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Marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the change in total revenue from hiring one more worker. |
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Marginal revenue is the increase in revenue when a firm raises its output price while marginal revenue product is the increase in the marginal product when a firm hires an additional worker. |
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There is no difference between the two terms. |
