Question

Please answer EACH question in details.

1- Identify your favorite retailer and state the channel of distribution for that retailer. Now name two competitors of your favorite retailer and explain what differentiates your favorite retailer from its two competitors. Make sure it's a Fashion retailer.

2- In reviewing Money Matters please consider if licensing royalty rates increase, decrease, or have no effect on the selling price of any item. Explain your reasoning.

3- M-2 A Externalities exist in just about every market. Discuss in detail:

(A) some major ones that we need to be concerned about (do NOT discuss pollution), and

(B) some minor ones that we typically do not need to worry about.

Try finding and posting web links that illustrate your point.

4- The chairman of Barnes and Noble has argued that book pubishers would make more money if book prices were lower. (a) What must be true about the elasticity of demand for books if he is correct?

(b) If we said that college textbooks were an exception to the above claim, what would that tell you about the elasticity of demand for textbooks? Explain why there might be a difference.

5- a) CROSS ELASTICITY OF DEMAND: What would happen to the market demand for beer if the price of wine increased by 20%? You might want to distinguish between different types of beer. (Your answer should show you understand the concept of cross elasticity of demand.)

b) INCOME ELASTICITY OF DEMAND: What would happen to the demand for fur coats if income went up by 20% What would happen to the demand for underwear if income went up by 20%. Again, you might want to distinguish different types of product within each category. (Your answers should reflect your knowledge of income elasticity of demand)

c) ADVERTISING ELASTICITY OF DEMAND: What would happen to the demand for fur coats if advertising for the product went up by 20% What would happen to the demand for underwear if advertising for the product went up by 20%. Again, you might want to distinguish different types of product within each category.

Answer 1

2- royalty is a fee paid for a license to the owner of the property, especially patents, copyrighted works, franchises or natural resources for their use. Licencing royalty rates does increases the selling prices of the item because the seller or producer need to pay some amount to the owner.

3- Yes externalities exist in every market or economy because externalities are the result of economic activities. externalities can be defined as the cost or benefit that affects the third party(any individual, organisation, property owner, or resources etc.) who do not related to it. externalities can be positive or negative:

i- Positive externalities: it has positive effect on third party.

ii- Negative externalities: it has negative effect on third party.

Some major Externalities:

Smoking, excessive drinking, road congestion due to increase in road users, burning of fossil fuels etc. these all are major negative externalities.

Education, vaccination etc. are some major positive externalities

Some Minor Externalities:

making flower garden, teaching poor people etc. are some positive externalities while

4- (A)- barnes and nobel have high elasticity of demand so if the prices will be high then demand for thes books will reduce and if prices will be low it will ultimately increase the demand for these books in market.

(B)- Demand for textbooks is relatively inelastic so if the price will be high still students have to buy them so the change in prices does not make much difference in demand for textbooks.

5- (a) cross elasticity of demand shows the effect of change in price of a commodity to the change in demand of its relative commodity it can be a substitute commodity or a complementry commodity. beer and wine are substitute goods so if the prices of wine has increased in the market than the demand for beer will increase.

(b) Income elasticity of demand shows the effect of change in income to the change in demand of the commodity. If income of a comsumer increases his demand also increases but depends on the type of the commodity.Broadly commodities are devided in three types- necessary goods, normal goods and luxury goods. if income increases demand for necessary goods does not increases that much but it increases largely for luxury goods. underwear is a necessary commodity so if comsumer's income increases still his demand will not increase that much but for fur coat his demand will increase as compare to underwear.

(c) Advertising elasticity of demand shows the effect of an increase or decrease in advertising on demand for the commodity. with the increase in advertising demand also increases and fur coat is a fashinable commodity so its demand will increase but underwear is a necessary commodity so its demand will not change much.

* please provide feedback if the answers help you.

*1st question was general question