Heavy Lifting - thoughts and web finds by an economist
     I also contribute to Division of Labour Load HL's Front Page
Friday, September 29, 2006

Microeconomics quiz of the week Part II

Another interesting supply and demand question from this week's WSJ microeconomics recap:
"Want a flat-panel TV with that tool belt? Home-improvement, clothing and office-supply stores plan to crash the party for big-screen television sets now dominated by Best Buy Co. and other electronics retailers. The development highlights the starring role that super-slim TVs are taking not just in the living room but in every nook of the home. And the new outlets could trigger ever-faster price declines as lowest-cost, lesser-known brands grab shelf space and consumer recognition." The article reports that if the increased number of retailers selling the flat-panel TVs results in a price war, then the manufacturers could cut back on the number of retailers. The article reports two reasons for new retailers entering the flat-panel TV market: exploding consumer demand; and more companies making the televisions.

1.) Use long-run analysis to explain why manufacturers and retailers are entering the flat-screen TV market.

2.) How will the entry of new retailers affect the profits of current sellers?

3.) What is the benefit to manufacturers of more retailers entering the flat-screen TV market? What is the potential harm?

Reviewed By: James Dearden, Lehigh University

Comments: Post a Comment


Le Chai - galerie du vin



Posts that contain Craig Depken per day for the last 90 days.


Heavy Lifting's Main Page
Email Me
Atom Feed

Heavy Lifting

Great Links

Money I Found Today

Heavy Lifting - Firehose style (56k warning)

Recent Posts

- Microeconomics quiz of the week Part II



Site Meter Blogroll Me!


Modified maystar design
powered by blogger