Economics

Answer the following questions in your text and submit the answers and any supporting spreadsheets to the Week Five Dropbox.

Application Question 2, page 255

Don't use plagiarized sources. Get Your Custom Essay on
Economics
From as low as $9/Page
Order Essay

The following paragraphs provide a description of the competition between Home Depot and Lowe’s on selling flowering plants:41
41 Miguel Bustillo, “The Garden Gloves Come Off—Big Box Retailers Battle to Engineer Prettier, Sturdier, Longer-Lasting Blooms,” Wall Street Journal (Online) April 27, 2011.

In the spring Home Depot and Lowe’s engage in an annual arms race to engineer and develop new scientifically altered versions of common flowering plants that are designed to bloom brighter or withstand neglect longer. The goal, in particular, is “to sell something the other guy doesn’t.”
Home Depot is the world’s largest home-improvement chain with $68 billion in annual revenue, while Lowe’s is the second-largest with $49 billion in annual revenue. Although spring is the peak selling season for all merchandise, plants and trees are used to entice consumers into the stores. Analysts estimate that for every dollar customers spend on plants, they spend $3 on accessories such as hoses, shovels, and gloves. Both companies employ weather forecasters to advise them on when plants should appear in stores in different parts of the country.
Lowe’s uses a team of PhD horticulturalists to choose among a thousand possible blooms developed by breeders around the world. After determining how the plants grow in different climates, the growers test mass production of hundreds and then thousands of plants. Both retailers try to secure exclusive rights to popular new varieties, although sometimes they are exclusive in name only.
Lowe’s uses a greenhouse complex in Huntersville, NC to grow plants and conduct consumer focus groups where customers can identify the flower varieties they most admire. Home Depot uses another greenhouse complex in Mills River, NC, two hours west, for the same purpose.

Discuss how the oligopoly models presented in this chapter apply to the behaviour of Home Depot and Lowe’s.

Application Question 3, page 287

The following discussion pertains to the pricing policies of Linear Technology Corp.:65

65 George Anders, “In a Tech Backwater, a Profit Fortress Rises,” Wall Street Journal, July 10, 2007.

The semiconductor industry Linear Technology Corp. has maintained strong profitability by operating at the fringes where competition is low and margins are high. This midsize company makes 7,500 arcane, unglamorous products that solve real-world problems for a long list of customers, including analogue chips that are too cheap for customers to haggle over, but perform chores too important to ignore. Many of Linear’s chips cost less than 50 cents to build and sell for three to four times as much, but customers seldom complain about the markup.

Linear made a 39% profit on its $1.1 billion sales in 2006, more than five times the average for U.S. industrial companies. However, other bigger chip makers, including Texas Instruments Inc., Richtek Technology Corp. of Taiwan, and Freescale Semiconductor Inc. of Austin, Texas, are now moving into the market and others may follow suit. Unlike in the digital chip world, in which a single winning design bought by a few big customers can yield huge profits, Linear would rather see its order book packed with small to midsize orders from companies too busy to haggle over prices. Intermec Inc., which makes mobile data scanners, uses Linear chips to obtain extra life from its devices’ batteries. The chips’ total cost is less than 5% of the materials budget. Performance is crucial for this company; price is not.

Traditionally the dozen or so major analogue chip companies have tiptoed around one another’s product lines, helping keep profit margins high. Each company established its strength decades ago, making it easy to extend existing product families and deepen relations with longtime customers. “We chip away a little at each others’ specialities,” says Jerald Fishman, chief executive of Analog Devices. “But there isn’t a lot of direct competition.”

Discuss how the price elasticity of demand influences the pricing strategies of Linear Technology Corp. What market model best describes this industry? Explain. For more information on Economics check on this: https://en.wikipedia.org/wiki/Economics

Custom Homework Writing Service

The Homework Writings
Order NOW For A 10% Discount!
Pages (550 words)
Approximate price: -

Our Advantages

Plagiarism Free Papers

Thehomeworkwritings.com’s team of writers write all papers from scratch. We deliver 100% original, unique papers. That’s what makes us the best custom homework writing service

Free Revisions

We provide unlimited free revisions to all customers and on all papers. Try The Homework Writings today for the best custom homework writing service and experience in the industry.

Title-page

Thehomeworkwritings.com gives clients title pages free of charge. Your only job is to fill out our order form. We will handle the rest.

Bibliography

As the leading essay writing service, we never submit any paper without a reference/bibliography page. We do this free of charge too.

Originality & Security

At Thehomeworkwritings.com, we take great pride in delivering only high-quality 100% original papers to all our clients. We also never share any of our clients’ information with third parties. Your data is safe with us.

24/7 Customer Support

No other custom homework writing service has a friendly, always available customer support team to respond to clients like us.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

We have the best customer support team for your essay writing needs.

Pricing

Flexible Pricing

You won’t find any other custom homework writing service with pricing as flexible and affordable as ours.

Communication

Admission help & Client-Writer Contact

We provide a direct line of communication with our writers for the best writing experience.

Deadlines

Paper Submission

As the leading custom homework writing service, we take deadlines very seriously. You will have your paper submitted on time without any delays.

Reviews

Customer Feedback

We truly value your feedback, good or bad, and always use your feedback to help us provide you with an even better custom homework writing service