1.

Governments create monopolies through intellectual property rights such as patents and copyrights because:

• they want firms to make profits.

• they encourage innovation.

• they do not create true monopoly power.

• they do not understand the losses due to monopoly.

2. In general, a monopolist:

• can select any price and quantity combination that is on the demand curve.

• is limited by the price and quantity that government regulations set.

• is a price taker.

3.

Economic profit in the long run is

Multiple Choice

• possible for both a monopoly and a perfect competitor.

• possible for a monopoly but not for a perfect competitor.

• impossible for both a monopolist and a perfect competitor.

• only possible when barriers to entry are nonexistent.

• can select any price and quantity that it wants.

A) What would be the consequences of the following expected trends in the future of the U.S. Hispanic market? (address each trend separately)

- Political  mobilization of Latino voters

- Researcher will focus on the study of consumer behavior of Hispanics, with emphasis on collectivism, metaphysical influences, changes in gender role relations, polymorphic leadership, influence of time and space, cross-border transactions, and the new greening of America.

B)  What are the implications for marketers of the trends listed in question A (also including trends like A younger and faster growing population, A more diversified cultural group: multiethnic and multifaceted Latino market, Cultural marketing becomes more important,Technological innovation will have a greater impact on Hispanics)

Identify a company that has a HIGH DEGREE of market power. Specifically identify at least three barriers to entry that helped this company become a near monopoly, AND discuss HOW the company came to acquire these barriers to entry. Discuss the consequences of this near monopoly to potential consumer/business buyers for that company's products, and share your opinions on how you believe this firm could/should be regulated to reduce the dead-weight loss to society that is the consequence of all near monopoly industries. If you wish to discuss the benefits that accrue to consumers/businesses/society as a result of your company's product innovation, community service, etc., please feel free to do so.

Advantages of outsourcing

Indicate whether each scenario in the following table is an example of outsourcing.

Which of the following are advantages of outsourcing? Check all that apply.

Increases degree of control

Creates opportunity for new exports

Increases technical know-how for future innovation

4. Answer parts (a) and (b) of this question. Venture capitalists rely relatively heavily on criteria relating to characteristics of the inventor (for example, whether he/she is capable of sustained effort) when deciding whether to fund a new innovation-based venture. On the other hand, internal review procedures tend to rely relatively heavily on criteria relating to characteristics of the invention (for example, whether the invention is technically feasible). (a) [25 marks] Explain the meaning of the terms “adverse selection" and “moral hazard". (b) [25marks ]Describe the main characteristics of venture capital. In what sense can venture capital be seen as a response to adverse selection and moral hazard in the market for funding new innovations?

We make IT environments more efficient, productive and secure, enabling fast, flexible
responses to a rapidly changing competitive landscape. We enable organisations to act
quickly on ideas by delivering infrastructure that can be easily composed and
recomposed to meet shifting demands so they can lead in today’s marketplace of
disruptive innovation.

This extract, especially the repetition of “we” is indicative of the fact that groups and
teams are at the core of the company’s success. Do you agree? Provide a balanced
debate by focussing on the HPE employee’s desire to form teams and groups and work within
those structures.

In your answer, by considering certain assumptions, comment on group characteristics that may
have unfolded at HPE over time.

32. Which of these new product characteristics is LEAST likely to increase the adoption rate:

-   product that can be demonstrated to outperform current products.

-   product that costs less than presently used products.

-   product that requires new patterns of use compared to existing products.

-   product that can be tried or sampled in small quantities.

33. Test marketing:

-   attempts to record consumers’ responses under reasonably realistic market conditions.

-   is basically the same as the screening and development stages of the new product development process.

-   is more common for industrial products than for consumer products because industrial markets usually involve fewer customers.

-   should be done slowly so that competitive actions can be observed and categorized.

34. Which is WRONG with regard to new products and product innovation:

-   most “new” products are just slight modifications of existing products.

-   planned obsolescence can cause some consumers to delay their purchases in order to wait for product improvements.

-   the most innovative new product ideas usually originate in research labs rather than in the marketplace.

-   the most successful new product innovation programs are organized just for a particular purpose; they are not ongoing research programs.

36. Meghan was disappointed to be assigned to work on a product in the mature phase of the product life cycle. Once she started working with the product team, she discovered all the following EXCEPT:

-   changes in consumers’ preferences were opening up new market segments.

-   end-of-cycle strategies were the most profitable for companies.

-   she could take the product into a new market segment to stimulate new growth.

-   some simple product redesign could completely reinvigorate the product.

1. Explain why drugs are covered and protected by copyright law but recipes are not.

2. What are the arguments for extending copyright protection to the fashion industry? How might it change the way clothes are produced and sold? Would it affect us, the final consumers?  

3. What do you think? Should the law extending copyright protection to the fashion industry be passed?

Copycats vs. Copyrights

Does it make sense to legally protect the fashion industry from knockoffs?

Fashion designer Zac Posen helps country singer Martina McBride choose a dress. Posen is one of those who want a law to protect designs from knockoffs.

I pride myself on being a man of substance. A wonk. A nerd, even. And like most nerds, I don’t have a great eye for fashion. So I ask this question seriously: what did you think of Chelsea Clinton’s Vera Wang wedding dress? Want to buy it? What if I can sell it to you really, really cheap?

On Aug. 5, Sen. Chuck Schumer (D-N.Y.) introduced S.3728: the Innovative Design Protection and Piracy Prevention Act. He’s got 10 cosponsors—including three Republicans—and a big idea: to extend copyright protections to the fashion industry, where none currently exist. That’s right: none. I—well, not I, but someone who can sew—can copy Vera Wang’s (extremely expensive) dress and sell it to you right now (for much less), and Wang can’t do a thing about it.

Allen Schwartz, founder and lead designer of the label ABS, has already promised to do exactly that. He’ll take the dress, remake it, and sell it to the masses for much cheaper. Is he stealing? Or is he popularizing? Schumer’s legislation suggests his answer: he wants to make Schwartz’s imitation illegal. Only Vera Wang should be able to profit from her designs, at least for the first three years (the length of Schumer’s proposed copyright). But what if he’s wrong? What if copying, despite what your teacher always told you, is ... good?

We’re used to the logic of copyright. Movies, music, and pharmaceuticals all use some form of patent or copyright protection. The idea is simple: if people can’t profit from innovation, they won’t innovate. So to encourage the development of stuff we want, we give the innovators something very valuable—exclusive access to the profit from their innovations. We’ve so bought into the logic that we allow companies to patent human genes.

And companies love copyright. They love it so much they persuaded Congress to pass the Sonny Bono Act, which extended individual copyright protections to the life of the author, plus another 70 years; and corporate copyrights to 120 years from creation, or 95 years from publication, whichever is earlier. That’s an absurdly long time, and it belies the original point of patents: does anyone seriously believe that a 40-year-old with a money-making idea is going to hold back because someone can mimic it 20 years after he dies?

At a certain point, copyrights stop protecting innovation and begin protecting profits. They scare off future inventors who want to take a 60-year-old idea and use it as the foundation to build something new and interesting. That’s the difficulty of copyrights, patents, and other forms of intellectual protection. Too little, and the first innovation won’t happen. Too much, and the second innovation—the one relying on the first—will be stanched.

Which is why we have to be careful when one industry or another demands more copyright protection for itself. “Intellectual property is legalized monopoly,” says James Boyle, a professor at Duke Law School. “And like any monopoly, its tendency is to raise prices and diminish availability. We should have a high burden of proof for whether it’s necessary."

Drug development probably meets the burden of proof. It costs hundreds of millions of dollars to bring a drug to market. If Pfizer could just copy the drugs Novartis develops, Novartis wouldn’t have much reason to develop drugs.

Recipes don’t. You can’t patent dessert. Just ask Jean-Georges Vongerichten. Years ago, he created a chocolate cake with a molten core of liquid chocolate. The recipe became a sensation. Which meant it appeared on menus all across the country, with no credit to JGV. That’s a bummer for its creator, but a boon to all of us who don’t live in New York. We get to eat it anyway. And yet innovation continues apace in the food world. JGV is still a rich man. We can have our cake and eat it, too. (Sorry, sorry.)

So which one is fashion? Well, look around. Sure seems as if there are a lot of clothing options, and at all manner of price points. The big fashion houses are raking in billions of dollars in profits. What’s the problem we’re trying to solve?

Well, there’s the principle of the thing. Designers don’t like being copied. It doesn’t seem fair. But there’s nothing fair about legal monopolies, either. The question is, which benefits consumers more?

Then there’s the matter of profit: Schwartz is threatening to take Wang’s profits. In theory, that might dissuade Wang from making new dresses. But America has never had copyright protection for dresses, and Wang keeps making—and profiting from—them. Meanwhile, Schwartz’s copies make versions of Wang’s designs available to consumers who would never be able to afford them otherwise. That has value, too. Copyright law is supposed to help consumers by protecting innovation, not producers by protecting profits. If we’re not having an innovation problem, we’re not having a problem that needs to be fixed through copyright.

Fordham University’s Susan Scafidi, who helped craft the legislation, says that it’s actually small designers that we need to worry about. They get ripped off, and because they don’t have the name recognition of a Vera Wang, there’s nothing they can do about it, and so they have to close up shop. But how many of them? There’s anecdotal evidence of this, but we’ve got record numbers of students signing up for fashion-design school, and the entire American fashion industry has emerged and thrived in the absence of copyright.

And what about the dangers of the new law? Schumer’s office has worked to protect against frivolous lawsuits. The language is very narrow, and cynical plaintiffs would have a tough road ahead of them. But the letter of the law does not always govern the effect of the law: small designers and retailers don’t have attorneys on retainer, and if bigger firms take the opportunity to start sending out a lot of intimidating cease-and-desist letters, or opportunists try to patent everything in sight and sue their way to prosperity, we could, at the least, see the legal fees and threats pile up—and ultimately consumers will pay for that.

And then there’s the question of creep: a judge could interpret the law as bigger than Congress intends, or a future Congress could expand the law beyond what Schumer intends—as has happened in other areas of copyright.

If we’re going to risk all that, the law needs to carry some serious benefits. And it might have one: innovation. “We have Allen Schwartz and six other companies making slavish copies of Vera Wang,” Scafidi says. “But suppose we have this law in place. The other companies can’t copy it exactly, so they go to their designers and create six or seven versions at the affordable price point.” In other words, the ability to copy might reduce the need to innovate.

Jennifer Jenkins, an intellectual-property expert at Duke, disagrees. “In fashion, copying has benefits,” she argues. First, knockoffs make designs trendy, and that increases the value of the original, and thus the incentives for designers to innovate. Second, it makes them affordable, so more people can wear them. Vera Wang and Allen Schwartz aren’t selling to the same crowds, and there are a lot more people shopping at discount stores than at designer boutiques (which is why many designers are now licensing their names to retail outlets like Target). And third, it speeds up innovation, as fashion designers have to keep churning out new products to stay ahead of the copycats.

But perhaps the strongest argument is that America’s apparel industry doesn’t seem broken—so why try and fix it? “America is the world fashion leader,” said Steven Kolb, director of the Council of Fashion Designers of America, the lead trade group in support of the Schumer bill, “and yet it is basically the only industrialized country that does not provide protection for fashion design.”

Run that by me one more time? We’re the world leader in fashion, so we should change our policy to mimic our lagging competitors?

Too often, copyrights are used not to protect consumers by making sure they have access to new products, but to protect the profits of producers. It’s no coincidence that the rise of the Internet—which led to an explosion of low-cost distribution networks, new forms of competition, and unexpected types of innovation—has also led to calls for new and stronger forms of intellectual protection.

Consumers assume this is all for them, as that’s what they’ve been told. But it isn’t. There’s a reason we’re skeptical of monopolies, and we shouldn’t forget that even when they’re dressed up as “copyrights.”

Question 1

At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000 Deferred tax asset 15,000 Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items: Depreciation expense – plant $7,000 Doubtful debts expense 3,000 Long-service leave expense 4,000 For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation – plant $8,000 Bad debts written off 2,000 Depreciation ratesfor taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies.

Required:

a) Determine the taxable income and income tax payable for the year to 30 June 2020. (2.5 Marks)

b) Determine by what amount the balances of the deferred liability and deferred tax asset will increase or decrease for the year to 30 June 2020 because of depreciation, doubtful debts and long-service leave.

c) Prepare the necessary journal entries to account for income tax assuming recognition criteria are satisfied. (2.5 marks)

d) What are the balances of the deferred tax liability and deferred tax asset at 30 June 2020?

Glaus Leasing Company agrees to lease equipment to Jensen Corporation on January 1, 2020. The following information relates to the lease agreement.

b. Calculation for annual rental payment

d. Prepare the journal entries Jensen would make in 2020 and 2021 related to the lease arrangement

e. Prepare the journal entries Glaus would make in 2020 and 2021