Chapter 7: Product Variety and Quality under Monopoly
*
Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
IntroductionMost firms sell more than one productProducts are differentiated in different wayshorizontallygoods of similar quality targeted at consumers of different typeshow is variety determined?is there too much varietyverticallyconsumers agree on qualitydiffer on willingness to pay for qualityhow is quality of goods being offered determined?
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Horizontal product differentiationSuppose that consumers differ in their tastesfirm has to decide how best to serve different types of consumeroffer products with different characteristics but similar qualitiesThis is horizontal product differentiationfirm designs products that appeal to different types of consumerproducts are of (roughly) similar qualityQuestions:how many products?of what type?how do we model this problem?
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
A spatial approach to product varietyThe spatial model (Hotelling) is useful to considerpricingdesignvarietyHas a much richer application as a model of product differentiation“location” can be thought of inspace (geography)time (departure times of planes, buses, trains)product characteristics (design and variety)consumers prefer products that are “close” to their preferred types in space, or time or characteristics
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
An geographic example of product variety
McDonald’s
Burger King
Wendy’s
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
A Spatial approach to product variety 2Assume N consumers living equally spaced along Main Street – 1 mile long.Monopolist must decide how best to supply these consumersConsumers buy exactly one unit provided that price plus transport costs is less than V.Consumers incur there-and-back transport costs of t per mileThe monopolist operates one shopreasonable to expect that this is located at the center of Main Street
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
The spatial model
z = 0
z = 1
Shop 1
t
x1
Price
Price
All consumers within
distance x1 to the left
and right of the shop
will by the product
1/2
V
V
p1
t
x1
p1 + tx
p1 + t.x
p1 + tx1 = V, so x1 = (V – p1)/t
What determines
x1?
Suppose that the monopolist
sets a price of p1
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
The spatial model 2
z = 0
z = 1
Shop 1
x1
Price
Price
1/2
V
V
p1
x1
p1 + t.x
p1 + t.x
Suppose the firm
reduces the price
to p2?
p2
x2
.
- Monopolistic competition refers to a market with many firms selling differentiated but similar products. Each firm faces a downward sloping demand curve and can influence prices. There is free entry and exit into the market.
- Oligopoly is characterized by a market with only a few firms selling either homogeneous or differentiated products. The firms are interdependent and can influence prices through their decisions. There is restricted entry into the market.
- Consumer surplus measures the difference between what consumers are willing to pay for a good and the actual price paid, representing the extra satisfaction consumers receive. Producer surplus is the difference between the price producers receive and the lowest price they are willing to supply at.
Micro review 1 for International Economics' students: the simple market model.
If you download this on a computer at the college (or open it on a computer that has PowerPoint), you'll be able to read detailed notes for each slide.
Eco ppt of seasnl &non seasnol vegetables......................................vaibhav9044
This document discusses demand, the law of demand, elasticity of demand, and degrees of competition. It defines demand as the total quantity consumers are willing to buy at a given price. The law of demand states that price and quantity demanded move in opposite directions, with exceptions for certain goods. Elasticity of demand measures the responsiveness of quantity demanded to changes in price, income, or prices of substitute/complement goods. Degrees of competition range from pure competition to monopoly.
The document provides instructions for students appearing for CBSE Board Examinations 2011-2012. It mentions that the code number on the question paper should be written on the answer booklet. It also notes that the paper contains 8 printed pages and students have 15 minutes to read the paper before writing answers. The paper then provides instructions and questions for the Economics exam, including short answer questions worth 1-4 marks and long answer questions worth 6 marks.
The document discusses key features and concepts related to monopolies, including how they arise and profit maximization strategies. It explains that monopolies have a single seller, no close substitutes, control price as a price maker, and may arise due to barriers to entry like legal restrictions or economies of scale. The document also covers natural monopolies, profit maximization under monopoly versus competition, equilibrium differences, short-run losses, monopoly supply curves, deadweight loss, and different degrees of price discrimination.
This document discusses international trade theory, including:
1) It outlines two basic questions in international trade - what determines trade and why countries gain from trade.
2) It describes the historical development of trade theory from mercantilism to absolute advantage and comparative advantage.
3) It provides examples to illustrate comparative advantage theory and opportunity cost, showing how countries can benefit from specializing in and trading goods they have a comparative lower cost of production in.
The document discusses third-degree price discrimination, where a firm can segment consumers based on observable characteristics and charge different prices to different groups. Under third-degree price discrimination, optimal profits are achieved by separating markets and setting different prices (pa ≠ pb) in each. However, whether using single or multiple prices, monopoly pricing depends on demand characteristics like price elasticity. The firm finds the profit-maximizing quantities (qa* and qb*) and corresponding prices (pa* and pb*) by setting marginal revenue equal to marginal cost in each market. The market with less elastic demand will face a higher price and larger markup over cost.
- Monopolistic competition refers to a market with many firms selling differentiated but similar products. Each firm faces a downward sloping demand curve and can influence prices. There is free entry and exit into the market.
- Oligopoly is characterized by a market with only a few firms selling either homogeneous or differentiated products. The firms are interdependent and can influence prices through their decisions. There is restricted entry into the market.
- Consumer surplus measures the difference between what consumers are willing to pay for a good and the actual price paid, representing the extra satisfaction consumers receive. Producer surplus is the difference between the price producers receive and the lowest price they are willing to supply at.
Micro review 1 for International Economics' students: the simple market model.
If you download this on a computer at the college (or open it on a computer that has PowerPoint), you'll be able to read detailed notes for each slide.
Eco ppt of seasnl &non seasnol vegetables......................................vaibhav9044
This document discusses demand, the law of demand, elasticity of demand, and degrees of competition. It defines demand as the total quantity consumers are willing to buy at a given price. The law of demand states that price and quantity demanded move in opposite directions, with exceptions for certain goods. Elasticity of demand measures the responsiveness of quantity demanded to changes in price, income, or prices of substitute/complement goods. Degrees of competition range from pure competition to monopoly.
The document provides instructions for students appearing for CBSE Board Examinations 2011-2012. It mentions that the code number on the question paper should be written on the answer booklet. It also notes that the paper contains 8 printed pages and students have 15 minutes to read the paper before writing answers. The paper then provides instructions and questions for the Economics exam, including short answer questions worth 1-4 marks and long answer questions worth 6 marks.
The document discusses key features and concepts related to monopolies, including how they arise and profit maximization strategies. It explains that monopolies have a single seller, no close substitutes, control price as a price maker, and may arise due to barriers to entry like legal restrictions or economies of scale. The document also covers natural monopolies, profit maximization under monopoly versus competition, equilibrium differences, short-run losses, monopoly supply curves, deadweight loss, and different degrees of price discrimination.
This document discusses international trade theory, including:
1) It outlines two basic questions in international trade - what determines trade and why countries gain from trade.
2) It describes the historical development of trade theory from mercantilism to absolute advantage and comparative advantage.
3) It provides examples to illustrate comparative advantage theory and opportunity cost, showing how countries can benefit from specializing in and trading goods they have a comparative lower cost of production in.
The document discusses third-degree price discrimination, where a firm can segment consumers based on observable characteristics and charge different prices to different groups. Under third-degree price discrimination, optimal profits are achieved by separating markets and setting different prices (pa ≠ pb) in each. However, whether using single or multiple prices, monopoly pricing depends on demand characteristics like price elasticity. The firm finds the profit-maximizing quantities (qa* and qb*) and corresponding prices (pa* and pb*) by setting marginal revenue equal to marginal cost in each market. The market with less elastic demand will face a higher price and larger markup over cost.
The document provides solutions to multiple choice and short answer questions related to consumer equilibrium and the concepts of utility, budget constraints, indifference curves, and marginal rates of substitution.
Some key points summarized:
- Total utility is maximum when marginal utility is zero, representing the point of satiety. Indifference curves are convex to the origin due to diminishing marginal rates of substitution.
- The budget line shows all affordable combinations of goods given prices and income. It is downward sloping as more of one good requires less of the other. Consumer equilibrium occurs where an indifference curve is tangent to the budget line.
- Marginal utility diminishes with increasing consumption of a good according to the law of diminishing
Economics can be defined as a social science that is studied about the behavior of people.
“A social science that deals with how consumers, producers and societies choose alternatives, among uses of scarce resources in process of producing, exchanging and consuming goods and services.”
This document discusses break even analysis and types of markets. It defines break even analysis as a tool to determine the sales volume needed to start making a profit. It outlines the key components of a break even analysis including fixed costs, variable unit costs, expected unit sales, unit price, total variable cost, total cost, total revenue, and profit/loss. An example is provided to illustrate how to calculate the break even point. The uses and limitations of break even analysis are also discussed. The document then defines different types of markets including consumer markets, business markets, global markets, and non-profit/government markets. It provides characteristics and examples of each type of market.
The document discusses break-even analysis, which is used to determine the sales volume needed for a business to start making a profit. It defines key terms like fixed costs, variable costs, unit price, total revenue, and break-even point. An example is given showing how to calculate break-even point using fixed costs of Rs. 30,000, variable costs of Rs. 7 per unit, and a selling price of Rs. 12 per unit. The break-even point in this example is 6,000 units. Factors that influence break-even point and limitations of break-even analysis are also outlined.
This document outlines the key topics and objectives to be covered in a chapter on monopoly. The lecture plan will examine the nature and forms of monopoly markets. It will analyze the pricing and output decisions of monopolists in the short run and long run. Additionally, it will explore multi-plant monopolies, price discrimination, and the degrees to which monopolies can engage in price discrimination. The objectives are to understand the emergence of monopoly power through barriers to entry, and analyze the economic inefficiency that monopolies create.
The document discusses key aspects of monopoly markets including:
- A monopoly is defined as a single seller of a product without close substitutes that controls the entire market.
- Features of monopoly include barriers to entry that allow the firm to be a price maker and make independent output decisions.
- Monopolies can maximize profits in the short run but aim for normal profits in the long run to deter new competition.
- Monopolies are economically inefficient as they produce at lower output levels than would be optimal, resulting in deadweight loss.
Economics 101Homework #5Directions The homework will be colle.docxjack60216
Economics 101
Homework #5
Directions: The homework will be collected in a box before the lecture. Please place your name, TA name and section number on top of the homework (legibly). Make sure you write your name as it appears on your ID so that you can receive the correct grade. Late homework will not be accepted so make plans ahead of time. Please show your work. Good luck!
Please realize that you are essentially creating “your brand” when you submit this homework. Do you want your homework to convey that you are competent, careful, professional? Or, do you want to convey the image that you are careless, sloppy, and less than professional. For the rest of your life you will be creating your brand: please think about what you are saying about yourself when you do any work for someone else!
1. Consider a monopolist where the market demand curve for the produce is given by P = 520 – 2Q. This monopolist has marginal costs that can be expressed as MC = 100 + 2Q and total costs that can be expressed as TC = 100Q + Q2 + 50.
a. Given the above information, what is this monopolist’s profit maximizing price and output if it charges a single price?
b. Given the above information, calculate this single price monopolist’s profit.
c. At the profit maximizing quantity, what is this monopolist’s average total cost of production (ATC)?
d. At the profit maximizing quantity, what is the profit per unit for this single price monopolist?
2. Consider a monopolist described by the following equations:
Market demand for monopolist’s product: P = 100 – Q
ATC for monopolist: ATC = 20 +(3/10) Q
MC for monopolist: MC = 20 + (3/5)Q
In this question we will use the above data to compare a single price monopolist to the same monopolist that is regulated either with average cost regulation or marginal cost regulation. At the end of the question you will fill out a table to compare your results.
a. Given the above information, what is the profit maximizing price and quantity for the single price monopolist? You should round your answers to the nearest whole number.
b. Given the above information, what is the level of profit for this single price monopolist?
c. Suppose this monopolist is regulated to produce at that quantity where price equals average total cost. Calculate the quantity the monopolist will produce and the price it will charge given this regulatory scenario.
d. Calculate the level of profits for the monopoly if it is regulated to produce that quantity where price equals average total cost. Explain how you got your answer.
e. Suppose this monopolist is regulated to produce at that quantity where price equals marginal cost. Calculate the quantity the monopolist will produce and the price it will charge given this regulatory scenario.
f. Calculate the level of profits for the monopoly if it is regulated to produce that quantity where price equals marginal cost.
g. How big a subsidy will the monopoly require in order to be willing to produce at t ...
Economics 100 most important questions cbsesvj8446160578
This document contains model answers to 16 common economics questions. It begins by defining key economic concepts like scarcity, economic problem, and opportunity cost. It then discusses production possibility curve and different types of economic problems like what to produce and how to produce. Other topics covered include demand and its determinants, law of demand, consumer equilibrium using indifference curve approach, and effects of price changes of related goods on demand. For each question, the response provides a clear and concise answer along with examples to illustrate key economic principles.
This document provides 33 questions and answers related to managerial economics concepts. Key topics covered include:
1. Definitions of production, short run and long run production, production functions and their assumptions.
2. The law of variable proportions, isoquants and their types, economies of scale, costs and cost of production.
3. Sunk costs, short run and long run cost functions, and why long run average cost curves are L-shaped.
4. Market structures including perfect competition, monopoly, oligopoly, monopolistic competition, and their characteristics.
5. Pricing under different market structures, monopoly power, bilateral monopoly, normal and super-normal profits, and
- A monopoly market is characterized by a single seller of a unique product without close substitutes. Barriers to entry like government protections, large economies of scale, or exclusive ownership of resources allow monopolies to exist.
- A monopoly is both the firm and the industry and is the price maker. It faces a downward sloping demand curve where price exceeds marginal revenue. The profit-maximizing quantity is where marginal revenue equals marginal cost.
- At this quantity, the monopoly sets the highest price that demand allows. If price exceeds average total cost, the monopoly earns economic profits. In the long run, only monopolies that earn super-normal profits can remain in business.
Theory Of consumer behaviour-Economical point of view-Shreevatsa KaranthShreevatsa karanth
1) The document discusses a consumer's choice between two goods given their budget constraint. It defines key concepts like the budget set, which consists of all bundles of goods a consumer can afford given prices and income.
2) The budget line represents combinations of goods that exhaust the consumer's income. Its slope is determined by the relative prices of goods, showing how much of one good must be given up to obtain more of the other.
3) Points below the budget line represent bundles that cost less than income, so a consumer could afford a bundle on the line with more of at least one good without reducing the other.
Subject :- Engineering Economics and Management
Here u can learn about market like perfectly market
Monopoly market , oligopoly market
National Income like GDP , GNP , NNP , PI , DI .
In basic language u can easily understand PPT.
If u like this PPT this my motive.
Thanks for Seeing this PPT.
- Students will investigate markets in groups of three by describing price changes over time for a selected market, researching the market online, suggesting reasons for price changes, and presenting findings to the class.
- Market prices are determined by the interaction of supply and demand - if demand is high relative to supply, prices will tend to rise, and if supply is high relative to demand, prices will tend to fall.
- The homework assignments involve creating notes on demand theory, analyzing examples of how demand changes based on determinants, and answering practice questions.
Slides 15(Chapter 22)What do we mean by network ef.docxwhitneyleman54422
Slides 15
(Chapter 22)
What do we mean by network effects?
Willingness to pay increases with the number of
people that acquire the good
Example: cell-phone, fax machine, Facebook…
People choices depend on the expected network size!
Often, there is a coordination problem!
3
How can we model demand with
network effects?
Setup for demand model:
Very large number of consumers. Thus, each
consumer doesn’t think he/she affects the overall
fraction that buys the good
Consumers have unit demand (e.g. they only want
one Facebook account)
Reservation values for the good are between 0 and
100, and uniformly distributed
Call these values vi
Price of good is p
4
How can we model demand with
network effects?
Setup for demand model:
Call the fraction of consumers buying the good f
Then individual demand is
Implication, even if a consumer has vi>>p, the
consumer won’t buy if nobody else is buying!
We are interested in aggregate demand f(p)
0 if
( )
1 if
i
i
i
fv p
q p
fv p
5
Let us start without network effects…
Then individual demand is
qi (p) = 0 if vi < p and qi (p) = 1 if vi ≥ p
If vi is uniformly distributed [0, 100] then
f(p) = (100 – p)/100
6
What happens with network effects?
The indifferent consumer satisfies vi = p/f
All consumers with vi > p/f buy the good!
His decision depends on i’s believes about what
everyone else is doing!
7
What happens with network effects?
We can think about aggregate demand in terms of
Nash equilibrium among consumers
Each consumer takes as given others’ choices while
deciding whether to buy the good or not
In equilibrium, each consumer selects the optimal
choice and correctly predicts the choices of others
8
How do we get aggregate demand?
Let all consumers believe f will get the good
Is f(p) = 0 a NE? Yes!
If f = 0, then vi f = 0 < p
This means that no consumer wants to get the good!
Is there another NE with f(p) > 0 ? Yes!
9
How do we get aggregate demand?
Is there another NE with f(p) > 0 ? Yes!
Let all consumers believe f > 0 will get the good
Recall indifferent consumer satisfies vi = p/f
Since vi is uniformly distributed [0, 100] then
f(p) = (100 – p/f)/100
The NE solve
100 f(p)2 – 100 f(p) + p = 0
Smallest of the two solutions f* is called critical mass
10
What are the profits of the firm?
For each p, profits depend on the selected NE!
It makes more profits in the largest NE
How can the firm affect equilibrium selection?
Slides 13
(Chapter 8)
2
Bundling
Firms sell goods as bundles
Selling two or more goods in a single package
Goods are close in nature, but slightly different
Goods are not necessarily complements
Complementary goods: buying one good
increases your utility from buying the other good
3
Bundling example: Microsoft
Consider MS Office
Can buy Office package for $350. This cont.
This document provides an overview of different market structures, including perfect competition, monopoly, monopolistic competition, and oligopoly. It defines key characteristics of each market structure and how pricing and profit maximization work. Specifically:
1. Perfect competition is defined by many buyers and sellers, homogeneous products, and firms as price takers. Equilibrium price is determined by the intersection of supply and demand.
2. A monopoly has a single seller and many buyers for a unique product without close substitutes. A monopolist can influence price by restricting output to maximize profits.
3. Other market structures like oligopoly, monopolistic competition, and duopoly are discussed in less detail.
This document discusses market efficiency and how economists use it to analyze resource allocation. It explains that markets aim to efficiently allocate resources by maximizing total surplus, which is the sum of consumer surplus and producer surplus. Consumer surplus represents the difference between what consumers are willing to pay and the actual price they pay, while producer surplus is the difference between the price received and marginal cost of production. The market achieves allocative efficiency when equilibrium price maximizes total surplus.
This document discusses market efficiency and how economists use it to analyze resource allocation. It explains that markets aim to efficiently allocate resources by maximizing total surplus, which is the sum of consumer surplus and producer surplus. Consumer surplus represents the difference between what consumers are willing to pay and the actual price they pay, while producer surplus is the difference between the price received and marginal costs of production. The market achieves efficiency when total surplus is maximized at the equilibrium price and quantity where demand equals supply.
Problem Set 2.pdfProblem Set 2 ECO105 Industrial Organiz.docxwkyra78
Problem Set 2.pdf
Problem Set 2
ECO105 Industrial Organization and Firm Strategy
Professor Michael Noel
University of California San Diego
------
1. A single-product monopolist sells output to two geographically separated markets. Arbitrage is not
possible. The inverse demand curve in market 1 is given by p1 = 8 - q1 and in market 2, it is p2 = 4 -
q2. Note: if you get stuck in one part, move on to the next.)
a. The monopolist currently produces the output at a single plant (called plant "A") with total cost
function C(qA) = 0.5qA
2. Hence qA = q1 + q2 is the total output of the firm (which we can also
call Q). Find the quantities sold in each market, q1 and q2, and total output Q. Find the profits of
the firm. (Hint: this is the basic third degree price discriminating problem. Make sure to
substitute qA out of the problem using the constraint, so that the problem is all in terms of the
two “free” variables, q1 and q2.)
b. (From an old exam.) The monopolist is considering adding a second plant, plant "B". The total
cost function for plant "B" is C(qB) = qB + 0.25qB
2. Hence, if the monopolist purchases the new
plant, her total production is qA + qB = Q, where qA is produced in plant A and qB is produced in
plant B. She then sells Q = q1 + q2 in output, where q1 is sold in market 1 and q2 is sold in market
2. Find the output sold in each market, q1 and q2, the amount of good produced at each plant, qA
and qB, and the total output, Q. Find the profits of the firm in this case. How much is the firm
willing to pay to purchase plant B? (Hint: Do NOT assume that a single plant is matched solely
with a single market! You only know that the total produced equals to the total sold, so q1 + q2 =
qA + qB ( = Q). There are now four quantities to find, q1, q2, qA, qB, but only three of them are
“free variables”, i.e. can be independently chosen. So for example, if you know q1, q2 and qA, it
necessarily determines what qB must be. So set up your profit function initially in terms of all
four quantities and but then use the constraint q1 + q2 = qA + qB to substitute out one of the four.
Which three quantities you keep in the equation is up to you. Then solve for three first order
conditions.)
c. (Challenging.) Assume a new law prohibits price discrimination and requires the monopolist to
charge the same price in both markets. Repeat part a. under this assumption, i.e. only plant A. Has
welfare increased, decreased or remained unchanged relative to part a.? Warning: check to see if
both markets are being served in equilibrium! (You will need to “add” up the two demand curves
– add the q’s, not the p’s! A diagram will help. Watch out for the kinks, it may be that only one
group will be served and it may be that both will be served. At the end it may help to plot your
numerical answer on your graph and make sure it makes sense. For example, if you find both
groups are served, you should be on the segment of the ...
The document defines efficiency as producing goods and services at the lowest possible cost to provide the greatest value. Markets are efficient when marginal cost equals marginal benefit. When price is lower than value, consumers enjoy surplus, and when price exceeds costs, producers earn surplus. However, markets can be inefficient due to price controls, taxes/subsidies, monopoly, public goods, and externalities, resulting in deadweight loss to society.
1IntroductionThe objective of this study plan is to evaluate.docxrobert345678
1
Introduction
The objective of this study plan is to evaluate the viability of our solution in relation to previously conducted test cases for companies operating in industries analogous to those of our own. In this section, we will concentrate on the manner in which these use cases measure the performance characteristics of various technical and behavioral qualities connected with an investment in technology made on behalf of a business. The viewpoints and data sources of stakeholders will be incorporated into our measuring system. This measurement framework will be utilized by us in order to assess and analyze the overall performance of our product. After the solution has been implemented, we will conduct post-implementation evaluations to determine how the solution affected the organization. The management of change will play a significant role in our overall research agenda. The plan will adhere to a certain format in providing the findings of the data analysis.
Measurement framework
In order to present an all-encompassing picture of performance, the measuring framework must to take into account the many stakeholder viewpoints as well as the various data sources. Perspectives from stakeholders may come from a variety of sources, such as the user community, project managers, or senior leadership. Customer feedback, system logs, and performance statistics are three examples of potential data sources (Thabane, 2009).
The purpose of the measurement framework is to supply stakeholders with viewpoints and data sources that may be utilized to evaluate the effectiveness of an investment in technology. The framework consists of four dimensions: behavioral characteristics, organizational aspects, user factors, and technological qualities (McShane, 2018). To evaluate how well the technology investment is working out, there is a separate set of performance indicators linked with each of the dimensions of the evaluation.
Indicators such as system uptime, reaction time, and throughput are examples of technical qualities. Indicators that make up behavioral qualities include things like user happiness, adoption rates, and the costs of training. Indicators like as return on investment (ROI) and total cost of ownership are included in the category of organizational variables (TCO). The metrics that make up user factors include things like user happiness, adoption rates, and training expenses (McShane, 2018).
The measuring framework draws its information from a variety of data sources, including organizational data, user data, performance data, and financial data. The return on investment (ROI) and total cost of ownership (TCO) of the technological investment may both be calculated using financial data (Jalal, 2017). The uptime, reaction time, and throughput of the system may all be evaluated based on the performance statistics. Data from users may be analyzed to determine factors such as user happiness, adoption rates, and the costs of training (Thabane,.
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- Total utility is maximum when marginal utility is zero, representing the point of satiety. Indifference curves are convex to the origin due to diminishing marginal rates of substitution.
- The budget line shows all affordable combinations of goods given prices and income. It is downward sloping as more of one good requires less of the other. Consumer equilibrium occurs where an indifference curve is tangent to the budget line.
- Marginal utility diminishes with increasing consumption of a good according to the law of diminishing
Economics can be defined as a social science that is studied about the behavior of people.
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This document discusses break even analysis and types of markets. It defines break even analysis as a tool to determine the sales volume needed to start making a profit. It outlines the key components of a break even analysis including fixed costs, variable unit costs, expected unit sales, unit price, total variable cost, total cost, total revenue, and profit/loss. An example is provided to illustrate how to calculate the break even point. The uses and limitations of break even analysis are also discussed. The document then defines different types of markets including consumer markets, business markets, global markets, and non-profit/government markets. It provides characteristics and examples of each type of market.
The document discusses break-even analysis, which is used to determine the sales volume needed for a business to start making a profit. It defines key terms like fixed costs, variable costs, unit price, total revenue, and break-even point. An example is given showing how to calculate break-even point using fixed costs of Rs. 30,000, variable costs of Rs. 7 per unit, and a selling price of Rs. 12 per unit. The break-even point in this example is 6,000 units. Factors that influence break-even point and limitations of break-even analysis are also outlined.
This document outlines the key topics and objectives to be covered in a chapter on monopoly. The lecture plan will examine the nature and forms of monopoly markets. It will analyze the pricing and output decisions of monopolists in the short run and long run. Additionally, it will explore multi-plant monopolies, price discrimination, and the degrees to which monopolies can engage in price discrimination. The objectives are to understand the emergence of monopoly power through barriers to entry, and analyze the economic inefficiency that monopolies create.
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Economics 101Homework #5Directions The homework will be colle.docxjack60216
Economics 101
Homework #5
Directions: The homework will be collected in a box before the lecture. Please place your name, TA name and section number on top of the homework (legibly). Make sure you write your name as it appears on your ID so that you can receive the correct grade. Late homework will not be accepted so make plans ahead of time. Please show your work. Good luck!
Please realize that you are essentially creating “your brand” when you submit this homework. Do you want your homework to convey that you are competent, careful, professional? Or, do you want to convey the image that you are careless, sloppy, and less than professional. For the rest of your life you will be creating your brand: please think about what you are saying about yourself when you do any work for someone else!
1. Consider a monopolist where the market demand curve for the produce is given by P = 520 – 2Q. This monopolist has marginal costs that can be expressed as MC = 100 + 2Q and total costs that can be expressed as TC = 100Q + Q2 + 50.
a. Given the above information, what is this monopolist’s profit maximizing price and output if it charges a single price?
b. Given the above information, calculate this single price monopolist’s profit.
c. At the profit maximizing quantity, what is this monopolist’s average total cost of production (ATC)?
d. At the profit maximizing quantity, what is the profit per unit for this single price monopolist?
2. Consider a monopolist described by the following equations:
Market demand for monopolist’s product: P = 100 – Q
ATC for monopolist: ATC = 20 +(3/10) Q
MC for monopolist: MC = 20 + (3/5)Q
In this question we will use the above data to compare a single price monopolist to the same monopolist that is regulated either with average cost regulation or marginal cost regulation. At the end of the question you will fill out a table to compare your results.
a. Given the above information, what is the profit maximizing price and quantity for the single price monopolist? You should round your answers to the nearest whole number.
b. Given the above information, what is the level of profit for this single price monopolist?
c. Suppose this monopolist is regulated to produce at that quantity where price equals average total cost. Calculate the quantity the monopolist will produce and the price it will charge given this regulatory scenario.
d. Calculate the level of profits for the monopoly if it is regulated to produce that quantity where price equals average total cost. Explain how you got your answer.
e. Suppose this monopolist is regulated to produce at that quantity where price equals marginal cost. Calculate the quantity the monopolist will produce and the price it will charge given this regulatory scenario.
f. Calculate the level of profits for the monopoly if it is regulated to produce that quantity where price equals marginal cost.
g. How big a subsidy will the monopoly require in order to be willing to produce at t ...
Economics 100 most important questions cbsesvj8446160578
This document contains model answers to 16 common economics questions. It begins by defining key economic concepts like scarcity, economic problem, and opportunity cost. It then discusses production possibility curve and different types of economic problems like what to produce and how to produce. Other topics covered include demand and its determinants, law of demand, consumer equilibrium using indifference curve approach, and effects of price changes of related goods on demand. For each question, the response provides a clear and concise answer along with examples to illustrate key economic principles.
This document provides 33 questions and answers related to managerial economics concepts. Key topics covered include:
1. Definitions of production, short run and long run production, production functions and their assumptions.
2. The law of variable proportions, isoquants and their types, economies of scale, costs and cost of production.
3. Sunk costs, short run and long run cost functions, and why long run average cost curves are L-shaped.
4. Market structures including perfect competition, monopoly, oligopoly, monopolistic competition, and their characteristics.
5. Pricing under different market structures, monopoly power, bilateral monopoly, normal and super-normal profits, and
- A monopoly market is characterized by a single seller of a unique product without close substitutes. Barriers to entry like government protections, large economies of scale, or exclusive ownership of resources allow monopolies to exist.
- A monopoly is both the firm and the industry and is the price maker. It faces a downward sloping demand curve where price exceeds marginal revenue. The profit-maximizing quantity is where marginal revenue equals marginal cost.
- At this quantity, the monopoly sets the highest price that demand allows. If price exceeds average total cost, the monopoly earns economic profits. In the long run, only monopolies that earn super-normal profits can remain in business.
Theory Of consumer behaviour-Economical point of view-Shreevatsa KaranthShreevatsa karanth
1) The document discusses a consumer's choice between two goods given their budget constraint. It defines key concepts like the budget set, which consists of all bundles of goods a consumer can afford given prices and income.
2) The budget line represents combinations of goods that exhaust the consumer's income. Its slope is determined by the relative prices of goods, showing how much of one good must be given up to obtain more of the other.
3) Points below the budget line represent bundles that cost less than income, so a consumer could afford a bundle on the line with more of at least one good without reducing the other.
Subject :- Engineering Economics and Management
Here u can learn about market like perfectly market
Monopoly market , oligopoly market
National Income like GDP , GNP , NNP , PI , DI .
In basic language u can easily understand PPT.
If u like this PPT this my motive.
Thanks for Seeing this PPT.
- Students will investigate markets in groups of three by describing price changes over time for a selected market, researching the market online, suggesting reasons for price changes, and presenting findings to the class.
- Market prices are determined by the interaction of supply and demand - if demand is high relative to supply, prices will tend to rise, and if supply is high relative to demand, prices will tend to fall.
- The homework assignments involve creating notes on demand theory, analyzing examples of how demand changes based on determinants, and answering practice questions.
Slides 15(Chapter 22)What do we mean by network ef.docxwhitneyleman54422
Slides 15
(Chapter 22)
What do we mean by network effects?
Willingness to pay increases with the number of
people that acquire the good
Example: cell-phone, fax machine, Facebook…
People choices depend on the expected network size!
Often, there is a coordination problem!
3
How can we model demand with
network effects?
Setup for demand model:
Very large number of consumers. Thus, each
consumer doesn’t think he/she affects the overall
fraction that buys the good
Consumers have unit demand (e.g. they only want
one Facebook account)
Reservation values for the good are between 0 and
100, and uniformly distributed
Call these values vi
Price of good is p
4
How can we model demand with
network effects?
Setup for demand model:
Call the fraction of consumers buying the good f
Then individual demand is
Implication, even if a consumer has vi>>p, the
consumer won’t buy if nobody else is buying!
We are interested in aggregate demand f(p)
0 if
( )
1 if
i
i
i
fv p
q p
fv p
5
Let us start without network effects…
Then individual demand is
qi (p) = 0 if vi < p and qi (p) = 1 if vi ≥ p
If vi is uniformly distributed [0, 100] then
f(p) = (100 – p)/100
6
What happens with network effects?
The indifferent consumer satisfies vi = p/f
All consumers with vi > p/f buy the good!
His decision depends on i’s believes about what
everyone else is doing!
7
What happens with network effects?
We can think about aggregate demand in terms of
Nash equilibrium among consumers
Each consumer takes as given others’ choices while
deciding whether to buy the good or not
In equilibrium, each consumer selects the optimal
choice and correctly predicts the choices of others
8
How do we get aggregate demand?
Let all consumers believe f will get the good
Is f(p) = 0 a NE? Yes!
If f = 0, then vi f = 0 < p
This means that no consumer wants to get the good!
Is there another NE with f(p) > 0 ? Yes!
9
How do we get aggregate demand?
Is there another NE with f(p) > 0 ? Yes!
Let all consumers believe f > 0 will get the good
Recall indifferent consumer satisfies vi = p/f
Since vi is uniformly distributed [0, 100] then
f(p) = (100 – p/f)/100
The NE solve
100 f(p)2 – 100 f(p) + p = 0
Smallest of the two solutions f* is called critical mass
10
What are the profits of the firm?
For each p, profits depend on the selected NE!
It makes more profits in the largest NE
How can the firm affect equilibrium selection?
Slides 13
(Chapter 8)
2
Bundling
Firms sell goods as bundles
Selling two or more goods in a single package
Goods are close in nature, but slightly different
Goods are not necessarily complements
Complementary goods: buying one good
increases your utility from buying the other good
3
Bundling example: Microsoft
Consider MS Office
Can buy Office package for $350. This cont.
This document provides an overview of different market structures, including perfect competition, monopoly, monopolistic competition, and oligopoly. It defines key characteristics of each market structure and how pricing and profit maximization work. Specifically:
1. Perfect competition is defined by many buyers and sellers, homogeneous products, and firms as price takers. Equilibrium price is determined by the intersection of supply and demand.
2. A monopoly has a single seller and many buyers for a unique product without close substitutes. A monopolist can influence price by restricting output to maximize profits.
3. Other market structures like oligopoly, monopolistic competition, and duopoly are discussed in less detail.
This document discusses market efficiency and how economists use it to analyze resource allocation. It explains that markets aim to efficiently allocate resources by maximizing total surplus, which is the sum of consumer surplus and producer surplus. Consumer surplus represents the difference between what consumers are willing to pay and the actual price they pay, while producer surplus is the difference between the price received and marginal cost of production. The market achieves allocative efficiency when equilibrium price maximizes total surplus.
This document discusses market efficiency and how economists use it to analyze resource allocation. It explains that markets aim to efficiently allocate resources by maximizing total surplus, which is the sum of consumer surplus and producer surplus. Consumer surplus represents the difference between what consumers are willing to pay and the actual price they pay, while producer surplus is the difference between the price received and marginal costs of production. The market achieves efficiency when total surplus is maximized at the equilibrium price and quantity where demand equals supply.
Problem Set 2.pdfProblem Set 2 ECO105 Industrial Organiz.docxwkyra78
Problem Set 2.pdf
Problem Set 2
ECO105 Industrial Organization and Firm Strategy
Professor Michael Noel
University of California San Diego
------
1. A single-product monopolist sells output to two geographically separated markets. Arbitrage is not
possible. The inverse demand curve in market 1 is given by p1 = 8 - q1 and in market 2, it is p2 = 4 -
q2. Note: if you get stuck in one part, move on to the next.)
a. The monopolist currently produces the output at a single plant (called plant "A") with total cost
function C(qA) = 0.5qA
2. Hence qA = q1 + q2 is the total output of the firm (which we can also
call Q). Find the quantities sold in each market, q1 and q2, and total output Q. Find the profits of
the firm. (Hint: this is the basic third degree price discriminating problem. Make sure to
substitute qA out of the problem using the constraint, so that the problem is all in terms of the
two “free” variables, q1 and q2.)
b. (From an old exam.) The monopolist is considering adding a second plant, plant "B". The total
cost function for plant "B" is C(qB) = qB + 0.25qB
2. Hence, if the monopolist purchases the new
plant, her total production is qA + qB = Q, where qA is produced in plant A and qB is produced in
plant B. She then sells Q = q1 + q2 in output, where q1 is sold in market 1 and q2 is sold in market
2. Find the output sold in each market, q1 and q2, the amount of good produced at each plant, qA
and qB, and the total output, Q. Find the profits of the firm in this case. How much is the firm
willing to pay to purchase plant B? (Hint: Do NOT assume that a single plant is matched solely
with a single market! You only know that the total produced equals to the total sold, so q1 + q2 =
qA + qB ( = Q). There are now four quantities to find, q1, q2, qA, qB, but only three of them are
“free variables”, i.e. can be independently chosen. So for example, if you know q1, q2 and qA, it
necessarily determines what qB must be. So set up your profit function initially in terms of all
four quantities and but then use the constraint q1 + q2 = qA + qB to substitute out one of the four.
Which three quantities you keep in the equation is up to you. Then solve for three first order
conditions.)
c. (Challenging.) Assume a new law prohibits price discrimination and requires the monopolist to
charge the same price in both markets. Repeat part a. under this assumption, i.e. only plant A. Has
welfare increased, decreased or remained unchanged relative to part a.? Warning: check to see if
both markets are being served in equilibrium! (You will need to “add” up the two demand curves
– add the q’s, not the p’s! A diagram will help. Watch out for the kinks, it may be that only one
group will be served and it may be that both will be served. At the end it may help to plot your
numerical answer on your graph and make sure it makes sense. For example, if you find both
groups are served, you should be on the segment of the ...
The document defines efficiency as producing goods and services at the lowest possible cost to provide the greatest value. Markets are efficient when marginal cost equals marginal benefit. When price is lower than value, consumers enjoy surplus, and when price exceeds costs, producers earn surplus. However, markets can be inefficient due to price controls, taxes/subsidies, monopoly, public goods, and externalities, resulting in deadweight loss to society.
Similar to Chapter 7 Product Variety and Quality under Monopoly.docx (20)
1IntroductionThe objective of this study plan is to evaluate.docxrobert345678
1
Introduction
The objective of this study plan is to evaluate the viability of our solution in relation to previously conducted test cases for companies operating in industries analogous to those of our own. In this section, we will concentrate on the manner in which these use cases measure the performance characteristics of various technical and behavioral qualities connected with an investment in technology made on behalf of a business. The viewpoints and data sources of stakeholders will be incorporated into our measuring system. This measurement framework will be utilized by us in order to assess and analyze the overall performance of our product. After the solution has been implemented, we will conduct post-implementation evaluations to determine how the solution affected the organization. The management of change will play a significant role in our overall research agenda. The plan will adhere to a certain format in providing the findings of the data analysis.
Measurement framework
In order to present an all-encompassing picture of performance, the measuring framework must to take into account the many stakeholder viewpoints as well as the various data sources. Perspectives from stakeholders may come from a variety of sources, such as the user community, project managers, or senior leadership. Customer feedback, system logs, and performance statistics are three examples of potential data sources (Thabane, 2009).
The purpose of the measurement framework is to supply stakeholders with viewpoints and data sources that may be utilized to evaluate the effectiveness of an investment in technology. The framework consists of four dimensions: behavioral characteristics, organizational aspects, user factors, and technological qualities (McShane, 2018). To evaluate how well the technology investment is working out, there is a separate set of performance indicators linked with each of the dimensions of the evaluation.
Indicators such as system uptime, reaction time, and throughput are examples of technical qualities. Indicators that make up behavioral qualities include things like user happiness, adoption rates, and the costs of training. Indicators like as return on investment (ROI) and total cost of ownership are included in the category of organizational variables (TCO). The metrics that make up user factors include things like user happiness, adoption rates, and training expenses (McShane, 2018).
The measuring framework draws its information from a variety of data sources, including organizational data, user data, performance data, and financial data. The return on investment (ROI) and total cost of ownership (TCO) of the technological investment may both be calculated using financial data (Jalal, 2017). The uptime, reaction time, and throughput of the system may all be evaluated based on the performance statistics. Data from users may be analyzed to determine factors such as user happiness, adoption rates, and the costs of training (Thabane,.
1Project One Executive SummaryCole Staats.docxrobert345678
1
Project One: Executive Summary
Cole Staats
Southern New Hampshire University
BUS 225: Critical Business Skills for Success
Jennyfer Puentes
November 14, 2022
Project One: Executive SummaryProblem
With the restricted economic activity expected because of the COVID-19 outbreak, and the rise in inflation the revenue for the automobile engine and parts manufacturing industry has been adjusted to decline by 10.9% by the end of 2022 (Pantalon, 2022). Based on the current challenges the automotive industry faces, we must diversify our engine manufacturing and its operations to expand our revenue. In this presentation, I will be using qualitative and quantitative data to explain why I think our company should rapidly explore the ever-evolving and growing popularity of the electric car industry and develop electric motors. I will show the qualitative data which will focus on the industry reports of engine manufacturing inside the automotive industry. The quantitative data that I will provide will estimate the projections for future operations and provide fact-checked historical data on the automotive industry. Automotive Manufacturing Industry
After conducting extensive research into the current automotive industry status, where I focused on the performance and expectations for the industry's future, the 2021 measured revenue of the US car and automobile manufacturing was $75 billion. This is compared to previous years, such as 2020 $69 billion, and in 2019 and 2018 $92 billion (MarketLine 2021). Although we saw a rise from 2020 to 2021 in revenue the automobile manufacturing industry revenue will continue to not keep pace with previous years. As the domestic demand for new vehicles trends higher, three automotive hubs are expected to gain greater traction over the next few years. With that said the US automotive industry is heavily established in the Great Lakes region. This region represents just over 36% of the automobile manufacturers in the US. Some of the most successful automobile making are located here which include the Ford Motor Company, General Motors, and Fiat Chrysler. All these manufacturers are in Michigan which makes up 15% of all automobile manufacturing revenue in the US. With that said there are 2 more regions where automobile manufacturers operate that make up 50% of all us manufacturers' locations. The Regions are the West Region, making up 25.4% of the industry locations, and the Southeast Region, making up 24.6% of the industry locations. After conducting research, the consumer's current mindset is shifting towards a “greener” option for the automobile. This option would have a smaller carbon footprint, providing an increase in producing vehicles that are more environmentally friendly. As a result of this new stance on a “greener” option by the consumer the hybrid and the electric car are gaining popularity and are expected to multiply over the next five years (MarketLine 2018). “In 2025 the North American hybri.
1
Management Of Care
Chamberlain University
NR452: Capstone
Professor Alison Colvin.
Date: November 23, 2022.
Management of Care
Management of care involves organizing, prioritizing, maintaining strict patient confidentiality, providing patient with efficient care, education to patient and families, risk stratification, coordination of care transition and medication management. Patient care management is provided to client by nurses and other health care professionals “Management of the critically injured patient is optimized by a coordinated team effort in an organized trauma system that allow for rapid assessment and initiation of life- preserving therapies. (Cantrell, E., & Doucet, J. 2018). Effective patient care management can impact patient heath more positively, when all healthcare professionals work together to provide quality care in promoting patient centered care. Adequate patient care can prevent readmission or admission, also can reduce distress, total cost of care, improve self-management, disease control and patient overall health.
Patient care is important to patient because its ensure that patient receive the needed possible care they deserve when in the hospital and out of the hospital, patient will feel their demand is understood and listened to if they health needs are met and understood by professionals that know how to manage their health care needs, health care management team member work together to ensure patient safety through effective communication and collaboration, advocating for patient by connecting patient to community and social services resources that will promote their health care needs can be beneficial to patient, environmental and home risk assessment, and effective facilitation of communication between members of the healthcare team.
Nurses play a role in managing a patient health, roles such as: Critical thinking skills, in this case the nurse can recognize any shift in patient health status which plays a significant role in decision making and patient centered care. Time management: delegation, prioritization such as knowing what to do first, what is important, and knowing what task is more important for the patient at a particular time. Patient education is also one of the many role’s nurses do to educate patient on what to expect during a procedure, or during recovery, also teachings on complications or adverse effects of a medication. Clinical reasoning and judgement which will promote quality of health through patient centered care that addresses patient specific health care needs. Holman, H. C., Williams, “et al”. (2019).
References
Cantrell, E., & Doucet, J. (2018). Initial Management of Life-Threatening Trauma.
DeckerMed Critical Care of the Surgical Patient.
https://doi.org/10.2310/7ccsp.2129
Holman, H. C., Williams, D., Johnson, J., Sommer, S., Ball, B. S., Lemon, T.,
& Assessment Technologies Institute. (2019). Nursing leadership
an.
1NOTE This is a template to help you format Project Part .docxrobert345678
This document provides a template for a student to complete a statistical analysis project involving descriptive statistics, hypothesis testing, and regression analysis. The template outlines the content and statistical analyses to be performed on two variables - sales and calls - including descriptive statistics, hypothesis tests, correlation, regression equation, and estimates. The student is instructed to input their results, analyses, and conclusions into the template for their assignment submission.
15Problem Orientation and Psychologica.docxrobert345678
1
5
Problem Orientation and Psychological Distress Among Adolescents: Do Cognitive Emotion Regulation Strategies Mediate Their Relationship?
Student's name; students' names
Department affiliation; university affiliation
Course name; course number
Instructors’ name
Assignment due date
Part One
The development of essential attitudes and abilities that help determine a person's susceptibility to psychological discomfort occurs throughout adolescence's formative years. This particular research aimed to investigate the relationship between problem-solving-oriented and cognitive-behavioral techniques for emotion regulation and levels of psychological discomfort (Speyer etal.,2021).
Notably, the issue of violence among adolescents is increasingly recognized as a severe problem in terms of public health. However, little research has investigated the importance of techniques to control cognitive emotion in teenagers, despite the increased interest in psychographic risk factors for violent conduct. The primary focus of this study will be to investigate the frequency of violent behaviors shown by adolescents and to determine the nature of the connection that exists between specific coping mechanisms for regulating cognition and emotion and various manifestations of aggressive behavior. Using confidential, self-reporting questionnaires, the research will conduct a cross-sectional survey of 3,315 students in grades 7 to 10 to investigate methods by which young adolescents may manage their cognitive processes, emotions, and actions connected to violence. The participants will be notified about the survey, but their personal information will not be public under any circumstances since this would violate ethical standards.
The influence of a father on his children might also vary depending on the gender and age of the kid. For boys, parental psychological distress is related to higher internalizing and externalizing issues throughout early adolescence. This finding lends credence to the notion that this stage of development may be especially significant in father-son exchanges. On the other hand, there is a correlation between maternal and paternal psychological discomfort in early infancy and increased levels of internalizing and externalizing difficulties in females (Speyer et al.,2021). Growing up with a father who struggles with mental illness may make girls more reserved, reducing the possibility that they would acquire issues that are manifested outside their bodies. This is one of the possible explanations.
Part Two
The whole of this project shall be guided by the research questions below: (what is the prevalence of adolescent violent behaviors? what is the relationship between specific strategies to regulate cognitive emotion and forms of violent behavior?)
To help operationalize the variables, a logistic regression model will be used to determine the nature of the connection between specific violent actions .
122422, 850 AMHow to successfully achieve business integrat.docxrobert345678
12/24/22, 8:50 AMHow to successfully achieve business integration - Chakray
Page 1 of 8https://www.chakray.com/how-to-successfully-achieve-business-integration/
How to successfully achieve
business integration
The whole process of integrated
business computing is a big step for
any company. From the moment it
decides to group all systems and
applications, the company must devote
much effort in creating a more
productive environment in accordance
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12/24/22, 8:50 AMHow to successfully achieve business integration - Chakray
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to the environment in which it is
located. Business integration is a
necessity. From many points of view
and experiences, the different strategies
have brought success to many
companies that were therefore
encouraged to carry out the entire
integration process. The benefits speak
for themselves: lower expenses for
systems, automation of processes, less
time spent in work, better control of
information.
-You can’t miss the 7 benefits of
Enterprise Application Integration!-
This is due to the fact that integrated
business computing works better. The
company’s IT works as a stage for the
renewal of its functions. Its capacity for
updating and deleting errors, as well as
cloud adaptation or hybrid operation,
allows it to generate unparalleled
results.
Companies with integrated business
computing are not only more
productive, but they also stand above
their competitors thanks to the great
work capacity they can assume. It
doesn’t matter if the systems they have
are complex, the management is simple
and allows work policies to be fulfilled
and its employees to perform better.
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1PAGE 5West Chester Private School Case StudyGrand .docxrobert345678
1
PAGE
5
West Chester Private School Case Study
Grand Canyon University
MGT-420: Organizational Behavior and Management
December 11th, 2022
West Chester Private School
Your introduction should be typed here. It should be at least four sentences and include a thesis statement that introduces all the key points of the paper. Please note that you should follow all APA writing rules within your essay. This means avoid first and second person, do not use contractions, and use citations throughout your paper. The final sentence in your introduction must be a strong thesis statement that introduces every key topic that will be introduced in the paper. Remember that a thesis should be one sentence. Here is an example: In the pages to follow, West Chester Private School (WCPS) will be discussed in the context of open systems, organizational culture, the decision to close and the closure process, the impact of technology and innovation on stakeholders, administration closure options, the plans for future direction of WCPS, along with the four functions of management.
External Environment and Open Systems
There are certain ways in which organizations interact with their external environment (as open systems). These ways rely on the Systems Approach to Management Theory, which perceives an organization as an open system that consists of interdependent and interrelated parts interacting as sub-systems (Jackson, 2017). Generally, organizations rely on the exchange of resources and information with their environments. More so, they cannot hold complete control over their behavior and actions, which are significantly impacted by external forces. For example, an organization may be impacted by various environmental conditions such as government regulations, client demands, and raw material availability. As an open system, an organization can interact with the external environment in the context of inputs, transformations, and outputs. Inputs refer to both human and non-human resources like materials, energy, and information. Transformations refer to the conversion of inputs into outputs. For example, a school can transform a student into an educated individual. Finally, outputs refer to what an organization is giving to the environment.
Internal Environment and Organizational Culture
At the time of the closure, the effectiveness of West Chester Private School (WCPS) as an open system was inadequate. One important factor that impacts the effectiveness of an open system is feedback. Feedback refers to the information that an open system receives from the external environment, which can be used to maintain a system at optimal working conditions or a steady state (Jung & Vakharia, 2019). In the case of WCPS, feedback could be received from parents, teachers, and students. At the time of the closure, none of these stakeholders was consulted. Instead, WCPS made a unilateral decision to close down two campuses without considering the input of parents, te.
12Toxoplasmosis and Effects on Abortion, And Fetal A.docxrobert345678
12
Toxoplasmosis and Effects on Abortion, And Fetal Abnormalities
Toxoplasmosis and Effects on Abortion, And Fetal Abnormalities
Abstract
The placenta is an immune-privileged organ that may tolerate antigen exposure without eliciting a strong inflammatory response that could result in an abortion. After that, the pregnancy can progress normally. Th1 answers, characterized by interferon-, are essential for suppressing intracellular infections. Therefore, the maternal immune system finds a catch-22 when intracellular parasites invade the placenta. The pro-inflammatory response required to eradicate the virus carries the danger of causing an abortion. Toxoplasma is a potent parasite that causes lifetime infections and is a leading cause of abortions in people and animals. This paper speculates that the pregnancy outcome may be affected by the Toxoplasma strain and the effectors of the parasite, both of which can modify the signaling pathways of the host cell.
Introduction
Fetuses infected with the protozoan parasite Toxoplasma gondii can develop a disorder known as toxoplasmosis, sometimes called congenital toxoplasmosis. This disease is transmitted from mother to child in the womb. A miscarriage or a stillbirth might happen as a result. A child with this illness may also have significant and progressively deteriorating difficulties in their vision, hearing, motor skills, cognitive ability, and other areas of development. The parasite Toxoplasma gondii is blamed for many pregnancies ending in miscarriage (Arranz-Solís et al., 2021). Most abortions happen in the first trimester of pregnancy or during the early stages of acute sickness. This research aimed to determine if women who had an abortion were more likely to be infected with toxoplasmosis.
To make matters worse, the toxoplasmosis-causing Toxoplasma gondii is an obligate intracellular pathogen that infects nearly every animal species with a thermoregulatory system. Transferring Toxoplasma from one host to another requires the development of tissue cysts that are infectious when ingested. This means the parasite is incentivized to ensure that the host organism lives during the infection. The parasite does this by stimulating an immune response powerful enough to limit parasite reproduction. Toxoplasma, on the other hand, uses a unique set of effectors to evade the immune response and ensure that the parasite population does not decrease to zero.
Results
Type II strains are the most common cause of infection in both animal and human hosts. However, all four clonal lineages of Toxoplasma may be found throughout Europe and North America. It has been established, however, that the bulk of the South American isolates identified is genetically distinct from the strains seen in North America and Europe. Certain sorts of isolates have been labeled as atypical strains. Birth abnormalities apart, type II strains are the most common in Europe and North America, where the great majority of .
122022, 824 PM Rubric Assessment - SOC1001-Introduction to .docxrobert345678
This document contains a rubric used to assess a student's draft and final submission of a sociology project. The rubric evaluates students on criteria such as including an introduction and conclusion, developing body paragraphs with support and examples, using proper grammar and APA style, and submitting a draft for feedback. Points are awarded on a scale from 0 to 40 for each criterion, with 0 being no submission and higher scores reflecting more developed, error-free work. The total possible score is 120 points.
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1 of 1 DOCUMENT
JAMES E. PETERSON, Plaintiff-Appellant, v. HAROLD KENNEDY, RICHARD
A. BERTHELSEN, and NATIONAL FOOTBALL LEAGUE PLAYERS
ASSOCIATION, Defendants-Appellees
No. 84-5788
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
771 F.2d 1244; 1985 U.S. App. LEXIS 23077; 120 L.R.R.M. 2520; 103 Lab. Cas.
(CCH) P11,677
February 6, 1985, Argued and Submitted - Los Angeles, California
September 16, 1985, Decided
PRIOR HISTORY: [**1] Appeal from the United States District Court for the Southern District of California, D.C.
NO. CV-80-1810-N, Honorable Leland C. Nielsen, District Judge, Presiding.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff professional football player appealed from judgments of the United States
District Court for the Southern District of California entered in favor of defendant union on plaintiff's claim for breach
of the duty of fair representation and in favor of defendant attorneys on plaintiff's legal malpractice claim.
OVERVIEW: Plaintiff football player filed suit against defendant union for breach of the duty of fair representation,
alleging that defendant attorneys, who were staff counsel for defendant union, erroneously advised him to file the wrong
type of grievance and failed to rectify the error when there was an opportunity to do so. Plaintiff also claimed that
defendant attorneys committed malpractice. The trial court entered judgment for defendants. On appeal, the court
affirmed. The court found that defendant union did not act in an arbitrary, discriminatory, or bad faith manner and held
that mere negligence or an error in judgment was insufficient to impose liability for breach of the duty of fair
representation. The court affirmed the directed verdict in favor of defendant first attorney because a union attorney may
not be held liable in malpractice to an individual union member for acts performed as the union's agent in the collective
bargaining process. The court affirmed the summary judgment entered in favor of defendant second attorney. The trial
court lacked personal jurisdiction over him because his only contact with the forum state were phone calls and letters.
OUTCOME: The court affirmed the judgment in favor of defendant union because it did not breach its duty of fair
representation. The court affirmed the directed verdict in favor of defendant first attorney because he was not liable in
malpractice to plaintiff football player for acts he performed as the union's agent. The court affi.
121122, 1204 AM Activities - IDS-403-H7189 Technology and S.docxrobert345678
12/11/22, 12:04 AM Activities - IDS-403-H7189 Technology and Society 22EW2 - Southern New Hampshire University
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IDS 403 Module Six Activity Rubric
Activity: 6-2 Activity: Reflection: Society
Course: IDS-403-H7189 Technology and Society 22EW2
Name: Jayee Johnson
Criteria Proficient Needs Improvement Not Evident Criterion Score
Reliable Evidence
from Varied Sources
30 / 30
Criterion Feedback
30 points
Integrates reliable
evidence from varied
sources throughout
the paper to support
analysis
22.5 points
Shows progress
toward proficiency,
but with errors or
omissions; areas for
improvement may
include drawing from
a diverse pool of
perspectives, using
more varied sources
to support the
analysis, or
integrating evidence
and sources
throughout the paper
to support the
analysis
0 points
Does not attempt
criterion
12/11/22, 12:04 AM Activities - IDS-403-H7189 Technology and Society 22EW2 - Southern New Hampshire University
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Criteria Proficient Needs Improvement Not Evident Criterion Score
You did a good job in integrating evidence and support from outside sources.
Different General
Education Lens
22.5 / 30
Criterion Feedback
You needed to identify an alternative lens through which to view your specific technology. How would your analysis
of your identified technologyʼs role in your event have been different if viewed through this lens?
30 points
Explains at least one
way in which the
analysis might have
been different if
another general
education lens was
used to analyze the
technologyʼs role in
the event
22.5 points
Shows progress
toward proficiency,
but with errors or
omissions; areas for
improvement may
include connecting a
different lens to
technologyʼs role in
the event or
providing more
support of that
connection
0 points
Does not attempt
criterion
12/11/22, 12:04 AM Activities - IDS-403-H7189 Technology and Society 22EW2 - Southern New Hampshire University
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Criteria Proficient Needs Improvement Not Evident Criterion Score
Interactions
30 / 30
Criterion Feedback
I thought that you did a really good job here in considering how your analysis of technology might impact your
interactions with those from other cultures or backgrounds.
30 points
Explains how
analyzing the
technologyʼs role in
the event can help
interactions with
those of a different
viewpoint, culture, or
perspectiv.
1. When drug prices increase at a faster rate than inflation, the .docxrobert345678
1. When drug prices increase at a faster rate than inflation, the groups of people that bear the burden of this increase are taxpayers and Medicare beneficiaries. Taxpayers are paying higher taxes as a result of increased government spending, and Medicare beneficiaries cannot keep up with the price of their prescriptions. When it comes to the factors in making a decision about increasing drug prices, I believe Big Pharma companies should act in a socially responsible manner, meaning they should base their decisions not solely on profit, and not solely on healthcare. There should be a balance, and new policies would be beneficial to help maintain that balance.
2. Lower-level employees have the responsibility to provide accurate information to management so that they can make the most informed decision. Lower-level employees also have the responsibility to not purposefully make material mistakes or purposefully not correct a known mistake.
3. Increased government spending will increase taxes for taxpayers and decrease available spending for other worthy issues. Taxpayers will essentially pay more in taxes and therefore have less income available. With drug prices rising faster than inflation, this will cause a widening gap between annual income and costs. Also, private health insurance costs will increase premiums and out of pocket costs for members. The stakeholders most directly impacted are the senior citizens that are dependent on their medication and can’t afford it or any other out of pocket costs because of the already wide gap between their income and expenses. I believe the government itself can be seen as a stakeholder as well because as they continue to increase Medicare funding, their deficit increases, causing them to take action to allocate resources effectively.
4. If the increase in price of existing drugs is preventing those who need those drugs from obtaining them, then to me it is hard to justify the increase based on R&D. There will always be a trade-off between affordable drugs and how quickly we can get new drugs. The government must devise a policy that improves Big Pharma companies’ incentive for affordability
and innovation.
5. Explain what you think each of the following statements means in the context of moral development.
. How far are you willing to go to do the right thing?
1. Stage 6 of moral development is about universal “self-chosen” ethical principles. This stage is about following your conscience even if it violates the law. In thinking of moral development, as time passes, one’s level of ethical reasoning advances and some issues may spark moral outrage that force a response.
. How much are you willing to give up to do what you believe is right?
1. This statement relates to moral development and how sometimes doing the right thing can have negative consequences. For example, an employee may notice a purposeful mistake by a manager. Let’s assume the employee is certain they will receiv.
1. Which of the following sentences describe a child functioning a.docxrobert345678
This document contains a 5 question multiple choice assessment about child language development and metalinguistic abilities. It tests understanding of rhyming, sound identification, syllable segmentation and blending skills in children ages 2-6. These skills develop as children progress from pre-linguistic to metalinguistic levels of language understanding. The document also contains a literature review on factors that impact work-life balance and job satisfaction such as stress, behavioral traits, attachment styles and domain interference/facilitation. It proposes a study using surveys and journaling to identify issues for employees and design interventions to improve work-life balance and performance.
1. How did the case study impact your thoughts about your own fina.docxrobert345678
1. How did the case study impact your thoughts about your own finances?
2. What were your thoughts and observations as you created your own balance sheet?
3. How might the balance sheet help you in future financial planning?
4. How close to reality do you think your estimated personal cash flow statement will be if you track your actual income and expenses for a month?
1. It gave me the desire to track my finances more closely and objectively. I liked how we can determine our net worth through some simple calculations and our inflows and outflows per month. Generally, I rely on simple finance apps like
Mint to track my finances. Currently, I do not create monthly budgets, but I now believe such action could be helpful.
2. I know that I have more assets than I am counting in the excel sheet. Therefore, my net worth is potentially higher. I also have a variety of streaming platforms.
I would benefit from switching from one platform to another month by month to save money. Streaming platforms are not a significant expense. Currently, my most considerable expense is transportation. Since gas prices are falling, this will help increase my surplus.
3. Accounting is math: it either works or doesn’t. Each can be traced from its inception (a sale, an expense, a money transfer) to the line on the financial statement. Since I don’t have much experience with financials, I try to seek out a mentor who is a family member. A balance sheet will ensure that I am not spending foolishly and ensure I am making appropriate purchases within the limits I set for myself. Proper planning will ensure I maximize my net worth.
4. It is important to consider cash flow when planning for the future
. It is important to save money every month in order to be able to make better financial decisions in the future. I hope to use some investing approaches for beginners to purchase funds without getting into debt. Most people underestimate how much they truly spend in a month. Therefore, I am underestimating how much I spend as well. I eat out quite a bit with friends and family, so my restaurant bill for the holidays might be higher than anticipated.
Foreign Policy Association
China and America
Author(s): David M. Lampton
Source: Great Decisions , 2018, (2018), pp. 35-46
Published by: Foreign Policy Association
Stable URL: https://www.jstor.org/stable/10.2307/26593695
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide
range of content in a trusted digital archive. We use information technology and tools to increase productivity and
facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
https://about.jstor.org/terms
Foreign Policy Association is collaborating with JSTOR to digitize, preserve.
1 The Biography of Langston Hughes .docxrobert345678
1
The Biography of Langston Hughes
Yanai Gonzalez
Ana G Mendez
November 17, 2022
The Biography of Langston Hughes
THE BIOGRAPHY OF LANGSTON HUGHES
2
On February 1, 1901, James Mercer Langston Hughes was born. He was born in
Joplin, Missouri, to James and Caroline Hughes, into a family of enslaved people and
enslavers (Leach, 2004). His father departed from the family, later divorcing their family,
forcing Langston's mother to move to Lawrence, Kansas, with his maternal grandmother. It
was from the latter that Langston learned about African American traditions, installing an
enormous sense of pride into the young man (Hughes et al., 2001). This greatly influenced his
writing, as evidenced by poems such as Mother to Son. He would then go on to join
Columbia University to study engineering, where he would write poetry for the Columbia
Daily Spectator. As a result of racial discrimination, he finally left the school and resided in
Harlem, where he was engulfed by the vibrant feeling of life (Leach, 2004).
Langston began cruising as a crewman aboard the S.S. Malone in 1923, after doing a
few odd jobs. He subsequently took his first white-collar job as Carter G. Woodson's assistant
at the Association for the Study of African American Life and History, a historian. He'd then
leave his work since it didn't enable him to write. He would later work as a busboy. He got
his big writing break when he met Vachel Lindsay, a famous poet of the time, with whom
Langston shared his poetry (Leach, 2004). Lindsay was heavily impressed and helped
Langston reach the big stage. Langston then went on to earn a Bachelor of Arts degree from
Lincoln University.
Langston began his literary career in 1921 by publishing The Crisis in the National
Association for the Advancement of Colored People magazine (Leach, 2004). The poem
Mother to Son was in this book and would go on to get much acclaim. He would go on to
release The Weary Blues along with other novels, short stories, and poems (Hughes et al.,
2001). He participated heavily in the Harlem Renaissance. Langston would pass away on
May 22, 1967, from surgery complications while being treated for prostate cancer.
Mother To Son by Langston Hughes
THE BIOGRAPHY OF LANGSTON HUGHES
3
Well, son, I’ll tell you:
Life for me ain’t been no crystal stair.
It’s had tacks in it,
And splinters,
And boards torn up,
And places with no carpet on the floor—
Bare.
But all the time
I’se been a-climbin’ on,
And reachin’ landin’s,
And turnin’ corners,
And sometimes goin’ in the dark
Where there ain’t been no light.
So boy, don’t you turn back.
Don’t you set down on the steps
’Cause you finds it’s kinder hard.
Don’t you fall now—
For I’se still goin’, honey,
I’se still climbin’,
And life for me ain’t been no crystal stair.
References
THE BIOGRAPHY OF LANGSTON HUGHES
4
Hughes, L., Hubbard, .
1 Save Our Doughmocracy A Moophoric Voter Registratio.docxrobert345678
This document provides a proposal for an event called "Save Our Doughmocracy: A Moophoric Voter Registration & Ice Cream Social Event" hosted by Ben & Jerry's and the Democratic National Committee. The event aims to help people register to vote in Georgia through a fun experience of sampling a new Ben & Jerry's ice cream flavor and connecting with Democratic candidates. The proposal outlines the event goals, strategy, SWOT analysis, target audience, location, timeline, budget, and marketing plan. The key goals are to support voter registration and Ben & Jerry's social mission of advocating for democracy. The event's uniqueness of combining voter registration, politics, and ice cream into one experience gives it a competitive advantage over similar
1 MINISTRY OF EDUCATION UNIVERSITY OF HAIL .docxrobert345678
1
MINISTRY OF EDUCATION
UNIVERSITY OF HAIL
COLLEGE OF ENGINEERING
كلية الهندسة
College of Engineering
Research Proposal Template
Please structure your Research Proposal based on the headings provided below, use a clear and legible font
and observe the page/word limit.
Research Project Title:
Motor Vehicle Safety Defects and Recall System: An Empirical Study in Saudi Arabia
Student Details:
Student Name
Student ID
Email Address
Date of Submission
Research Project
Serial No.
Supervisor Name Supervisor Signature Start Date
Only for College Officials Use
College Approval
Master of Quality Engineering and Management
Research Proposal
2
Master of Quality Engineering and Management 2020-2021
كلية الهندسة
College of Engineering
1- Research Title
Provide a short descriptive title of your proposed research (max. 20 words)
Motor Vehicle Safety Defects and Recall System: An Empirical Study in Saudi Arabia
2- Research Summary
Summarize the aims, significance and expected outcomes of your proposed research (max. 250 words).
It is to set the mechanism for recalling vehicles with manufacturing defects that affect in
one way or another the safety of vehicles and their users, and this is done by linking a
unified system in which the defective vehicle data is added and called in the system to
the maintenance centers of the concerned vehicle agencies. Workmanship defects are
classified as: (1) Basic defects, which are considered to have a serious and direct impact
on the safety of the vehicle and its users, and the inspection process cannot be passed
until after the defect is fixed. (2) Warning defects, which are considered a defect in the
product, but the effect of the defect does not threaten the safety of the vehicle and its
users pass the examination process and the defect is added as a warning only.
This research proposal aims to find the most effective way to reach every defected
vehicle and the effective way to deal with the vehicle owner to do the necessary changes
especially if it's related to safety in a systematic way. The purpose of the project is to
develop a new business model that was never used everywhere in the world and Saudi
Arabia will take the lead to publish this model to the rest of the world. Ensuring that the
practice will be used is the most effective practise as enabling to force the defected car
owner to have their vehicles fixed and the defected was solved.
Master of Quality Engineering and Management
Research Proposal
3
Master of Quality Engineering and Management 2020-2021
كلية الهندسة
College of Engineering
3- Introduction
This section should provide a description of the basic facts and importance of the research area - What is the research
area, the motivation of research, and how important is it for the industry practice/knowledge advancement? (max. 200 .
1
Assessment Brief
Module Code
Module Name Managing Operations and the Supply Chain
Level
7
Module Leader Andrew Gough
Module Code
BSOM046
Assessment title:
AS1: The Future of Work
Weighting: 40%
Submission dates:
13 December 2022, please see NILE (Northampton Integrated
Learning Environment) under Assessment Information
Feedback and Grades
due:
12 January 2023
Please read the whole assessment brief before starting work on the Assessment Task.
The Assessment Task
You will conduct a review of the literature to identify the origins of the concept of the
Technological Unemployment and to chart its development up to the present day.
Following your review, you are to critically evaluate the impact of Technological
Unemployment on a company of your choice.
You will be expected to illustrate your discussion with examples from the trade press
and other authoritative sources.
The word count limit for this assessment is 1800 words (+/- 10%). In line with normal
practice, tables, figures, references and appendices are excluded from this word count.
Pawanrat Meepian
Pawanrat Meepian
2
Assessment Breakdown
1. Establish the scenario for your report by selecting an organisation of any type, sector and
size to focus your report on. Describe:
a) Which organisation is it? (type, sector and size)
b) What are the main products and/or services provided by the organisation?
c) Who are the main customers?
(10% of word count)
2. Prepare a literature review, charting the development of the concept of Technological
Unemployment from its inception until the present day.
Ensure that you include references to at least 10 peer-reviewed articles, including the 2017
paper by Frey and Osborne that has been supplied. You may also find relevant reviews in
the trade press and from other authoritative sources.
(45% of word count)
3. Apply Frey and Osborne’s findings (Appendix A) in the context of your chosen company.
Consider a low impact scenario, when only jobs at high risk (> 70%) are replaced
by technology. How does Frey and Osborne’s study suggest that the company will change?
Compare the predictions implied by Frey and Osborne’s study with the recent work by
Cords and Prettner (2022).
In your view, is Technological Unemployment a net benefit to society?
(45% of word count)
Learning Outcomes
On successful completion of this assessment, you will be able to:
a) Recognise, analyse and critically reflect on key concepts, managerial frameworks
and techniques available to operations managers.
b) Demonstrate conceptual and practical understanding of the opportunities and
constraints that organisational characteristics place on operations managers and on
operational decision making in the supply chain context.
f) Demonstrate ability to relate theory to practice and to identify and proactively
anticipate broader implications for.
How to Download & Install Module From the Odoo App Store in Odoo 17Celine George
Custom modules offer the flexibility to extend Odoo's capabilities, address unique requirements, and optimize workflows to align seamlessly with your organization's processes. By leveraging custom modules, businesses can unlock greater efficiency, productivity, and innovation, empowering them to stay competitive in today's dynamic market landscape. In this tutorial, we'll guide you step by step on how to easily download and install modules from the Odoo App Store.
How to Setup Default Value for a Field in Odoo 17Celine George
In Odoo, we can set a default value for a field during the creation of a record for a model. We have many methods in odoo for setting a default value to the field.
A Free 200-Page eBook ~ Brain and Mind Exercise.pptxOH TEIK BIN
(A Free eBook comprising 3 Sets of Presentation of a selection of Puzzles, Brain Teasers and Thinking Problems to exercise both the mind and the Right and Left Brain. To help keep the mind and brain fit and healthy. Good for both the young and old alike.
Answers are given for all the puzzles and problems.)
With Metta,
Bro. Oh Teik Bin 🙏🤓🤔🥰
🔥🔥🔥🔥🔥🔥🔥🔥🔥
إضغ بين إيديكم من أقوى الملازم التي صممتها
ملزمة تشريح الجهاز الهيكلي (نظري 3)
💀💀💀💀💀💀💀💀💀💀
تتميز هذهِ الملزمة بعِدة مُميزات :
1- مُترجمة ترجمة تُناسب جميع المستويات
2- تحتوي على 78 رسم توضيحي لكل كلمة موجودة بالملزمة (لكل كلمة !!!!)
#فهم_ماكو_درخ
3- دقة الكتابة والصور عالية جداً جداً جداً
4- هُنالك بعض المعلومات تم توضيحها بشكل تفصيلي جداً (تُعتبر لدى الطالب أو الطالبة بإنها معلومات مُبهمة ومع ذلك تم توضيح هذهِ المعلومات المُبهمة بشكل تفصيلي جداً
5- الملزمة تشرح نفسها ب نفسها بس تكلك تعال اقراني
6- تحتوي الملزمة في اول سلايد على خارطة تتضمن جميع تفرُعات معلومات الجهاز الهيكلي المذكورة في هذهِ الملزمة
واخيراً هذهِ الملزمة حلالٌ عليكم وإتمنى منكم إن تدعولي بالخير والصحة والعافية فقط
كل التوفيق زملائي وزميلاتي ، زميلكم محمد الذهبي 💊💊
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A Visual Guide to 1 Samuel | A Tale of Two HeartsSteve Thomason
These slides walk through the story of 1 Samuel. Samuel is the last judge of Israel. The people reject God and want a king. Saul is anointed as the first king, but he is not a good king. David, the shepherd boy is anointed and Saul is envious of him. David shows honor while Saul continues to self destruct.
How to Manage Reception Report in Odoo 17Celine George
A business may deal with both sales and purchases occasionally. They buy things from vendors and then sell them to their customers. Such dealings can be confusing at times. Because multiple clients may inquire about the same product at the same time, after purchasing those products, customers must be assigned to them. Odoo has a tool called Reception Report that can be used to complete this assignment. By enabling this, a reception report comes automatically after confirming a receipt, from which we can assign products to orders.
Chapter 7 Product Variety and Quality under Monopoly.docx
1. Chapter 7: Product Variety and Quality under Monopoly
*
Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
IntroductionMost firms sell more than one productProducts are
differentiated in different wayshorizontallygoods of similar
quality targeted at consumers of different typeshow is variety
determined?is there too much varietyverticallyconsumers agree
on qualitydiffer on willingness to pay for qualityhow is quality
of goods being offered determined?
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Horizontal product differentiationSuppose that consumers differ
in their tastesfirm has to decide how best to serve different
types of consumeroffer products with different characteristics
but similar qualitiesThis is horizontal product
differentiationfirm designs products that appeal to different
types of consumerproducts are of (roughly) similar
qualityQuestions:how many products?of what type?how do we
model this problem?
Chapter 7: Product Variety and Quality under Monopoly
2. Chapter 7: Product Variety and Quality under Monopoly
*
A spatial approach to product varietyThe spatial model
(Hotelling) is useful to considerpricingdesignvarietyHas a much
richer application as a model of product
differentiation“location” can be thought of inspace
(geography)time (departure times of planes, buses,
trains)product characteristics (design and variety)consumers
prefer products that are “close” to their preferred types in
space, or time or characteristics
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
An geographic example of product variety
McDonald’s
Burger King
Wendy’s
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
A Spatial approach to product variety 2Assume N consumers
living equally spaced along Main Street – 1 mile
long.Monopolist must decide how best to supply these
consumersConsumers buy exactly one unit provided that price
3. plus transport costs is less than V.Consumers incur there-and-
back transport costs of t per mileThe monopolist operates one
shopreasonable to expect that this is located at the center of
Main Street
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
The spatial model
z = 0
z = 1
Shop 1
t
x1
Price
Price
All consumers within
distance x1 to the left
and right of the shop
will by the product
1/2
V
V
p1
t
x1
p1 + tx
p1 + t.x
p1 + tx1 = V, so x1 = (V – p1)/t
What determines
x1?
Suppose that the monopolist
sets a price of p1
Chapter 7: Product Variety and Quality under Monopoly
4. Chapter 7: Product Variety and Quality under Monopoly
*
The spatial model 2
z = 0
z = 1
Shop 1
x1
Price
Price
1/2
V
V
p1
x1
p1 + t.x
p1 + t.x
Suppose the firm
reduces the price
to p2?
p2
x2
x2
Then all consumers
within distance x2
of the shop will buy
from the firm
Chapter 7: Product Variety and Quality under Monopoly
5. Chapter 7: Product Variety and Quality under Monopoly
*
The spatial model 3Suppose that all consumers are to be served
at price p.The highest price is that charged to the consumers at
the ends of the marketTheir transport costs are t/2 : since they
travel ½ mile to the shopSo they pay p + t/2 which must be no
greater than V.So p = V – t/2.Suppose that marginal costs are c
per unit.Suppose also that a shop has set-up costs of F.Then
profit is p(N, 1) = N(V – t/2 – c) – F.
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Monopoly pricing in the spatial modelWhat if there are two
shops?The monopolist will coordinate prices at the two
shopsWith identical costs and symmetric locations, these prices
will be equal: p1 = p2 = pWhere should they be located?What is
the optimal price p*?
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Location with two shops
Suppose that the entire market is to be served
Price
Price
z = 0
z = 1
If there are two shops
6. they will be located
symmetrically a
distance d from the
end-points of the
market
Suppose that
d < 1/4
d
1 - d
Shop 1
Shop 2
1/2
The maximum price
the firm can charge
is determined by the
consumers at the
center of the market
Delivered price to
consumers at the
market center equals
their reservation price
p(d)
p(d)
Start with a low price
at each shop
Now raise the price
at each shop
What determines
p(d)?
The shops should be
moved inwards
V
V
7. Chapter 7: Product Variety and Quality under Monopoly
*
Chapter 7: Product Variety and Quality under Monopoly
*
Location with two shops 2
Price
Price
z = 0
z = 1
Now suppose that
d > 1/4
d
1 - d
8. Shop 1
Shop 2
1/2
p(d)
p(d)
Start with a low price
at each shop
Now raise the price
at each shop
The maximum price
the firm can charge
is now determined
by the consumers
at the end-points
of the market
Delivered price to
consumers at the
end-points equals
their reservation price
Now what
determines p(d)?
The shops should be
moved outwards
V
V
9. Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Location with two shops 3
Price
Price
z = 0
z = 1
1/4
3/4
Shop 1
Shop 2
1/2
It follows that
shop 1 should
be located at
1/4 and shop 2
at 3/4
Price at each
shop is then
p* = V - t/4
V - t/4
10. V - t/4
Profit at each shop
is given by the
shaded area
Profit is now p(N, 2) = N(V - t/4 - c) – 2F
c
c
V
V
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Three shops
Price
Price
z = 0
z = 1
1/2
What if there
are three shops?
By the same argument
they should be located
at 1/6, 1/2 and 5/6
1/6
11. 5/6
Shop 1
Shop 2
Shop 3
Price at each
shop is now
V - t/6
V - t/6
V - t/6
Profit is now p(N, 3) = N(V - t/6 - c) – 3F
V
V
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Optimal number of shopsA consistent pattern is emerging.
Assume that there are n shops. We have already considered n
= 2 and n = 3. When n = 2 we have p(N, 2) = V - t/4 When n =
3 we have p(N, 3) = V - t/6 They will be symmetrically located
distance 1/n apart. It follows that p(N, n) = V - t/2n
Aggregate profit is then p(N, n) = N(V - t/2n - c) – nF
How many
shops should
12. there be?
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Optimal number of shops 2
Profit from n shops is p(N, n) = (V - t/2n - c)N - nF
and the profit from having n + 1 shops is:
p*(N, n+1) = (V - t/2(n + 1)-c)N - (n + 1)F
Adding the (n +1)th shop is profitable if p(N,n+1) - p(N,n) > 0
This requires tN/2n - tN/2(n + 1) > F
which requires that n(n + 1) < tN/2F.
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
An example
Suppose that F = $50,000 , N = 5 million and t = $1
Then tN/2F = 50
For an additional shop to be profitable we need n(n + 1) < 50.
This is true for n < 6
There should be no more than seven shops in this case: if n =
6 then adding one more shop is profitable.
But if n = 7 then adding another shop is unprofitable.
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Some intuitionWhat does the condition on n tell us?Simply, we
should expect to find greater product variety when:there are
13. many consumers.set-up costs of increasing product variety are
low.consumers have strong preferences over product
characteristics and differ in theseconsumers are unwilling to
buy a product if it is not “very close” to their most preferred
product
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
How much of the market to supplyShould the whole market be
served?Suppose not. Then each shop has a local monopolyEach
shop sells to consumers within distance rHow is r determined?
it must be that p + tr = V so r = (V – p)/tso total demand is
2N(V – p)/tprofit to each shop is then p = 2N(p – c)(V – p)/t –
Fdifferentiate with respect to p and set to zero:dp/dp = 2N(V –
2p + c)/t = 0So the optimal price at each shop is p* = (V +
c)/2If all consumers are served price is p(N,n) = V – t/2nOnly
part of the market should be served if p(N,n)< p*This implies
that V < c + t/n.
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Partial market supplyIf c + t/n > V supply only part of the
market and set price p* = (V + c)/2If c + t/n < V supply the
whole market and set price p(N,n) = V – t/2nSupply only part
of the market:if the consumer reservation price is low relative
to marginal production costs and transport costsif there are very
few outlets
Chapter 7: Product Variety and Quality under Monopoly
14. Chapter 7: Product Variety and Quality under Monopoly
*
Social optimum
Are there too
many shops or
too few?
What number of shops maximizes total surplus?
Total surplus is therefore NV - Total Cost
Total surplus is then total willingness to pay minus total costs
Total surplus is consumer surplus plus profit
Consumer surplus is total willingness to pay minus total
revenue
Profit is total revenue minus total cost
Total willingness to pay by consumers is N.V
So what is Total Cost?
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Social optimum 2
Price
Price
z = 0
z = 1
Assume that
there
are n shops
Consider shop
i
1/2n
1/2n
Shop i
t/2n
15. t/2n
Total cost is
total transport
cost plus set-up
costs
Transport cost for
each shop is the area
of these two triangles
multiplied by
consumer density
This area is t/4n2
V
V
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Social optimum 3
Total cost with n shops is, therefore: C(N,n) = n(t/4n2)N + nF
= tN/4n + nF
Total cost with n + 1 shops is: C(N,n+1) = tN/4(n+1)+ (n+1)F
Adding another shop is socially efficient if C(N,n + 1) < C(N,n)
This requires that tN/4n - tN/4(n+1) > F
which implies that n(n + 1) < tN/4F
The monopolist operates too many shops and, more
generally, provides too much product variety
16. If t = $1, F = $50,000,
N = 5 million then this
condition tells us
that n(n+1) < 25
There should be five shops: with n = 4 adding another shop is
efficient
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Product variety and price discriminationSuppose that the
monopolist delivers the product.then it is possible to price
discriminateWhat pricing policy to adopt?charge every
consumer his reservation price Vthe firm pays the transport
coststhis is uniform delivered pricingit is discriminatory
because price does not reflect costs
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Product variety and price discriminationSuppose that the
monopolist delivers the product.then it is possible to price
discriminateWhat pricing policy to adopt?charge every
consumer his reservation price Vthe firm pays the transport
coststhis is uniform delivered pricingit is discriminatory
because price does not reflect costs
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
17. Product variety and price discrimination 2Should every
consumer be supplied?suppose that there are n shops evenly
spaced on Main Streetcost to the most distant consumer is c +
t/2nsupply this consumer so long as V (revenue) > c + t/2nThis
is a weaker condition than without price discrimination.Price
discrimination allows more consumers to be served.
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Product variety & price discrimination 3 How many shops
should the monopolist operate now?
Suppose that the monopolist has n shops and is supplying the
entire market.
Total revenue minus production costs is NV – Nc
Total transport costs plus set-up costs is C(N, n)=tN/4n + nF
So profit is p(N,n) = NV – Nc – C(N,n)
But then maximizing profit means minimizing C(N, n)
The discriminating monopolist operates the socially optimal
number of shops.
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Monopoly and product qualityFirms can, and do, produce goods
of different qualitiesQuality then is an important strategic
variableThe choice of product quality determined by its ability
to generate profit; attitude of consumers to q ualityConsider a
monopolist producing a single goodwhat quality should it
have?determined by consumer attitudes to qualityprefer high to
low qualitywilling to pay more for high qualitybut this requires
that the consumer recognizes qualityalso some are willing to
18. pay more than others for quality
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Demand and qualityWe might think of individual demand as
being of the formQi = 1 if Pi < Ri(Z) and = 0 otherwise for each
consumer iEach consumer buys exactly one unit so long as price
is less than her reservation pricethe reservation price is affected
by product quality ZAssume that consumers vary in their
reservation pricesThen aggregate demand is of the form P =
P(Q, Z)An increase in product quality increases demand
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Demand and quality 2
Begin with a particular demand curve
for a good of quality Z1
Price
Quantity
P(Q, Z1)
P1
Q1
If the price is P1 and the product quality
is Z1 then all consumers with reservation
prices greater than P1 will buy the good
R1(Z1)
These are the
inframarginal
consumers
19. This is the
marginal
consumer
Suppose that an increase in
quality increases the
willingness to pay of
inframarginal consumers more
than that of the marginal
consumer
Then an increase in product
quality from Z1 to Z2 rotates
the demand curve around
the quantity axis as follows
R1(Z2)
P2
Quantity Q1 can now be
sold for the higher
price P2
P(Q, Z2)
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Demand and quality 3
Price
Quantity
P(Q, Z1)
P1
Q1
R1(Z1)
Suppose instead that an
increase in
quality increases the
willingness to pay of marginal
20. consumers more
than that of the inframarginal
consumers
Then an increase in product
quality from Z1 to Z2 rotates
the demand curve around
the price axis as follows
P(Q, Z2)
Once again quantity Q1
can now be sold for a
higher price P2
P2
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Demand and quality 4The monopolist must choose bothprice (or
quantity)qualityTwo profit-maximizing rulesmarginal revenue
equals marginal cost on the last unit sold for a given
qualitymarginal revenue from increased quality equals marginal
cost of increased quality for a given quantityThis can be
illustrated with a simple example:
- Q) where Z is an index of quality
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Demand and quality 5
P = Z(q - Q)
Assume that marginal cost of output is zero: MC(Q) = 0
Cost of quality is C(Z) = aZ2
21. This means that quality is
costly and becomes
increasingly costly
Marginal cost of quality = dC(Z)/d(Z)
= 2aZ
The firm’s profit is:
p(Q, Z) =PQ - C(Z)
= Z(q - Q)Q - aZ2
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Demand and quality 6
Again, profit is:
p(Q, Z) =PQ - C(Z)
= Z(q - Q)Q - aZ2
The firm chooses Q and Z to maximize profit.
Take the choice of quantity first: this is easiest.
Marginal revenue = MR =
Zq - 2ZQ
Zq -
Q* = q/2
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
22. Demand and quality 7
Total revenue = P*Q* =
(Zq/2)x(q/2) =
Zq2/4
So marginal revenue from increased quality is
MR(Z) = q2/4
Marginal cost of quality is
MC(Z) = 2aZ
Equating MR(Z) = MC(Z) then gives
Z* = q2/8a
Does the monopolist produce too high or too low quality?
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Demand and quality: multiple productsWhat if the firm chooses
to offer more than one product?what qualities should be
offered?how should they be priced?Determined by costs and
consumer demand
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Demand and quality: multiple products 2An example:two types
of consumereach buys exactly one unit provided that consumer
surplus is nonnegativeif there is a choice, buy the product
offering the larger consumer surplustypes of consumer
distinguished by willingness to pay for qualityThis is vertical
product differentiation
Chapter 7: Product Variety and Quality under Monopoly
23. Chapter 7: Product Variety and Quality under Monopoly
*
Vertical differentiationIndirect utility to a consumer of type i
from consuming a product of quality z at price p is Vi = qi(z –
zi) – p where qi measures willingness to pay for quality;zi is the
lower bound on quality below which consumer type i will not
buyassume q1 > q2: type 1 consumers value quality more than
type 2assume z1 > z2 = 0: type 1 consumers only buy if quality
is greater than z1:never fly in coachnever shop in Wal-Martonly
eat in “good” restaurantstype 2 consumers will buy any quality
so long as consumer surplus is nonnegative
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Vertical differentiation 2Firm cannot distinguish consumer
typesMust implement a strategy that causes consumers to self-
selectpersuade type 1 consumers to buy a high quality product
z1 at a high priceand type 2 consumers to buy a low quality
product z2 at a lower price, which equals their maximum
willingness to pay Firm can produce any product in the range
MC = 0 for either quality type
z, z
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Vertical differentiation 3
24. For type 2 consumers charge maximum willingness to pay for
the low quality product: p2 = q2z2
Suppose that the firm offers two products with qualities z1 > z2
Now consider type 1 consumers: firm faces an incentive
compatibility constraint
q1(z1 – z1) – p1 > q1(z2 – z1) – p2
Type 1 consumers prefer the high quality to the low quality
good
q1(z1 – z1) – p1 > 0
Type 1 consumers have nonnegative consumer surplus from the
high quality good
These imply that p1 < q1z1 – (q1 - q2)z2
There is an upper limit on the price that can be charged for the
high quality good
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Vertical differentiation 4Take the equation p1 = q1z1 – (q1 –
q2)z2this is increasing in quality valuationsincreasing in the
difference between z1 and z2quality can be prices highly when
it is valued highlyfirm has an incentive to differentiate the two
products’ qualities to soften competition between
themmonopolist is competing with itselfWhat about quality
choice?prices p1 = q1z1 – (q1 – q2)z2; p2 = q2z2check the
incentive compatibility constraintssuppose that there are N1
type 1 and N2 type 2 consumers
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Vertical differentiation 5
25. Profit is
P = N1p1 + N2p2 =
N1q1z1 – (N1q1 – (N1 + N2)q2)z2
This is increasing in z1 so set z1 as high as possible: z1 =
For z2 the decision is more complex
(N1q1 – (N1 + N2)q2) may be positive or negative
z
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Vertical differentiation 6
Case 1: Suppose that (N1q1 – (N1 + N2)q2) is positive
Then z2 should be set “low” but this is subject to a constraint
Recall that p1 = q1z1 – (q1 - q2)z2
So reducing z2 increases p1
But we also require that q1(z1 – z1) – p1 > 0
Putting these together gives:
The equilibrium prices are then:
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Vertical differentiation 7Offer type 1 consumers the highest
possible quality and charge their full willingness to payOffer
type 2 consumers as low a quality as is consistent with incentive
compatibility constraintsCharge type 2 consumers their
26. maximum willingness to pay for this qualitymaximum
differentiation subject to incentive compatibility constraints
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Vertical differentiation 8
Case 1: Now suppose that (N1q1 – (N1 + N2)q2) is negative
Then z2 should be set as high as possible
The firm should supply only one product, of the highest
possible quality
What does this require?
From the inequality offer only one product if:
Offer only one product:
if there are not “many” type 1 consumers
if the difference in willingness to pay for quality is “small”
Should the firm price to sell to both types in this case? YES!
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Empirical Application: Price Discrimination and Imperfect
Competition
Although we have presented price discrimination and product
design (versioning) issues in the context of a monopoly, these
same tactics also play a role in more competitive settings of
imperfect competition
Imagine a two-store setting again
Assume N customers distributed evenly between the two stores,
each with maximum willingness to pay of V .
27. No transport cost—Half of the consumers always buys at
nearest store. Other half always buys at cheapest store.
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Price Discrimination and Imperfect Competition 2
If both stores operated by a monopolist, set price = V.
Cannot set it higher of there will be no customers.
Setting it lower though gains nothing.
What if stores operated by separate firms?
Imagine P1 = P2 = V. Store 1 serves N/4 price-sensitive
customers and N/4 price-insensitive ones. The same is true for
Store 2.
It gains N(V - -sensitive customers
from Store 2
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Price Discrimination and Imperfect Competition 3
MORAL 1: Both firms have a real incentive to cut price.
This ultimately proves self-defeating
Cutting their price does not increase their likelihood
of shopping at a particular place. It just loses revenue.
MORAL 2: Unlike the monopolist who sets the same price to
everyone, these firms have an incentive to discriminate and so
28. continue to charge a high price to loyal consumers while pricing
low to others.
In equilibrium, both still serve N/2 customers but now do so at a
price closer to cost.
This is especially frustrating in light of the “brand-loyal” or
price-insensitive customers
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Price Discrimination and Imperfect Competition 4
The intuition then is that price discrimination may be associated
with imperfect competition and become more prominent as
markets get more competitive (but still less than perfectly
competitive).
This idea is tested by Stavins (2001) with airline prices.
Restrictions such as a required Saturday night stay-over or an
advanced purchase serve as screening mechanism for price-
sensitive customers. Hence, restrictions lead to lower ticket
price.
Stavins (2001) idea is that price reduction associated with flight
restrictions will be small in markets that are not very
competitive.
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Price Discrimination and Imperfect Competition 6
Stavins (2001) looks at nearly 6,000 tickets covering 12
different city-pair routes in September, 1995.
She finds strong support for the dual hypothesis that:
In highly competitive (low HHI) markets, a Saturday night
29. restriction leads to a $253 price reduction but only a $165
reduction in less competitive ones.
a) passengers flying on a ticket with restrictions pay less;
b) price reduction shrinks as concentration rises
In highly competitive (low HHI) markets, an Advance Purchase
restriction leads to a $111 price reduction but only a $41
reduction in less competitive ones.
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Price Discrimination and Imperfect Competition 5
Variable Coefficient t-Statistic Coefficient t-
Statistic
Saturday
Night Stay – 0.408 – 4.05 -----
-----
Required
Saturday
Night Stay 0.792 3.39 -----
-----
RequiredxHHI
Advance Purchase ----- ----- – 0.023
–5.53 Required
Advance Purchase ----- ----- 0.098
8.38
RequiredxHHI
30. NOTE: HHI is the Herfindahl Index. A Saturday Night Stay
or an Advance Purchase lowers the price significantly. But the
HHI terms show that this effect weakens as market
concentration increases.
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Demand and quality A1
Price
Quantity
q
Z1q
P(Q,Z1)
How does increased quality
affect demand?
Z2q
P(Q, Z2)
MR(Z1)
MR(Z2)
q/2
Q*
P1 = Z1q/2
P2 = Z2q/2
When quality is Z1
price is
Z1q/2
When quality is Z2
price is
Z2q/2
Chapter 7: Product Variety and Quality under Monopoly
31. Chapter 7: Product Variety and Quality under Monopoly
*
Demand and quality A2
Price
Quantity
q
Z1q
Z2q
q/2
Q*
P1 = Z1q/2
P2 = Z2q/2
An increase in quality from
Z1 to Z2 increases
revenue by this area
So an increase is quality from
Z1 to Z2 increases surplus
by this area minus the
increase in quality costs
The increase in total
surplus is greater than
the increase in profit.
The monopolist produces
too little quality
Social surplus at quality Z1
is this area minus quality
costs
Social surplus at quality Z2
is this area minus quality
32. costs
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Demand and quality
Derivation of aggregate demand
Order consumers by their reservation prices
Aggregate individual demand horizontally
Price
Quantity
1
2
3
4
5
6
7
8
Chapter 7: Product Variety and Quality under Monopoly
33. Chapter 7: Product Variety and Quality under Monopoly
*
Location choice 1
d < 1/4
We know that p(d) satisfies the following constraint:
p(d) + t(1/2 - d) = V
This gives:
p(d) = V - t/2 + td
- t/2 + td
Aggregate profit is then: p(d) = (p(d) - c)N
= (V - t/2 + td - c)N
This is increasing in d so if d < 1/4 then d should be increased.
Chapter 7: Product Variety and Quality under Monopoly
Chapter 7: Product Variety and Quality under Monopoly
*
Location choice 2
d > 1/4
We now know that p(d) satisfies the following constraint:
p(d) + td = V
This gives:
p(d) = V - td
Aggregate profit is then: p(d) = (p(d) - c)N
= (V - td - c)N
This is decreasing in d so if d > 1/4 then d should be decreased.
Chapter 7: Product Variety and Quality under Monopoly
UNKNOWN-0.bin
34. UNIVERSITY OF NORTHAMPTON
FACULTY OF BUSINESS & LAW
MASTER OF BUSINESS ADMINISTRATION
Financial Decision Making (FINM036)
Written Assignment
Author:
Student ID:
Instructor:
Submission Date: 19th December 2022
Report Analyzing the Performance and Operations of James
Halstead PLC
Table of Contents
James Halstead PLC
Introduction
This statement is a financial analysis of James Halstead PLC,
which is a significant international group of business that
product flooring or commercial, contract and residential
35. markets. With the complexities and difficulties of running a
business, financial analysis, performance evaluation of the
company, corporate governance, and the evolution of various
business operations have emerged as important tasks that every
manager have to occasionally complete in order to assess when
a break is necessary to boost productivity. Jams Halstead PLC
has been listed on the Alternative Investment Market (AIM) in
London Stock Exchange (LSE) since 2006 (James Halstead
PLC,2022). In this statement will analysis the radios for the
past 5 years as well as efficiency and liquidity.
Additionally, the business will be compared with the
competitor named Headlam Group, which is British company
and distributes flooring all over Europe. Headlam Group also
listed on the Alternative Investment Market in London Stock
Exchange as same as James Halstead PLC. Moreover, both of
them are the same industry and same goal which is become a
Financial Times Stock Exchange 100 (FTSE 100) company in
the future. To become FTSE 100, the company’s storks have to
be weighted by market capitalization and the 100 companies
with the highest market caps make it into index (IG.COM,2019).
Company Overview
James Halstead PLC is British company which was
founded by James Halstead in 1915. Nowadays, in 2022, James
Halstead PLC has workforce about 820 individuals with sixteen
(16) sites worldwide comprises three (3) sites in United
Kingdom, two (2) sites in Germany, one (1) site in Ireland, one
(1) site in Norway, one (1) site in France, one (1) site in
Sweden, one (1) site in Australia, one (1) site in New Zealand,
one (1) site in Hong Kong, one (1) site in China, one (1) site in
Canada, one (1) site in India, one (1) site in Dubai and one (1)
site in Malaysia (Financial Times,2022). However, the
headquarters of the company located in Manchester, England,
36. United Kingdom.
Back to beginning, the company was started as a weaving
enterprise, and its initial product line consisted of woven cotton
fabrics that were both waterproofed and colored. However, this
was to turn to the production of rubberized fabric, which is used
to make rainwear and outdoor clothes and in 1934, they
increased their ability to manufacture flooring materials. Before
the end of 1940’s, they successes created a first of its kind vinyl
sheet product, Polyflor which is become the foundation of the
business's success. The company was on the Stock Exchange,
issuing 10,000 ordinary shares of 10 shillings each and the
company chose to focus 100% of its resources into the flooring
market in 2004. Today, Halstead's flooring materials can be
found in public, commercial, and residential structures
worldwide, including schools, hospitals, and transportation
facilities. Members of the Halstead family are still on the board
of directors, and the company is still committed to
entrepreneurship and innovation.
The stork of the company was listed on the Alternative
Investment Market in London Stock Exchange on 18th
December 2006. The company operates several subsidiaries,
including Polyflor Limited, Halstead Flooring International
Limited, Halstead Flooring Concepts Pty Limited, Phoenix
Distribution (N.W.) Limited and Polyflor Australia Pty Limited,
and so forth.
Not to mention, James Halstead PLC believes that economic and
environmental sustainability are mutually exclusive. Because of
this, they always working to increase reuse and recycling while
decreasing resource use, waste and the carbon footprint. James
Halstead PLC was assured by the external audits and
certification listed such as ISO 14001, ISO 9001, BES 6001, SA
8000 and BS OHSAS 18001 (James Halstead PLC,2022).
Equity Holdings
37. The top 10 shareholders of James Halstead PLC are
summarized in the table below based on the quantity of stocks
held and the ownership percentage. The top ten shareholders
hold 47.52% of the total equity whereby the institutional
stockholders and individual stockholders account for 31.71%
and 15.81% respectively.
Shareholders
Names
Equities
%
John Halstead Settlement
70,894,436
17.0%
Mark Halstead
26,505,134
6.36%
Octopus Investments Ltd.
25,037,295
6.01%
Sanford DeLand Asset Management Ltd.
13,522,766
3.24%
Lt Col Warren Settlement
11,975,000
2.87%
Mavis Warren Settlement
11,975,000
2.87%
Edith Hayhurst
11,427,000
2.74%
Investec Wealth & Investment Ltd.
10,789,000
38. 2.59%
Susan Jane Halstead
8,027,000
1.93%
Geoffrey Halstead
7,945,000
1.91%
Total
198,097,631
47.52 %Statement
Chairman's Statement to the Annual General Meeting
reveals that James Halstead PLC took the decision to increase
the levels of stockholdings since cost and supply continued to
affect the global markets. Commercial flooring continues to be
resilient and sales are generally higher than they were at this
stage last year also the stock levels reduce by over 10%.
Besides that, availability of shipping has improved on the other
hand, the shipping rate will remain lower. Additionally, the fall
in the value of the pound has given exports a competitive edge.
Although their international markets face difficulties, it is still
early in their fiscal year, and historically, the second part of
their financial year has been their stronger
(RSN,2022).Competition
Headlam Group is produces and distributes flooring
products under palettone, polyflor and camaro and so forth, as
same as James Halstead PLC, for commercial and domestic uses
in the United Kingdom, Australasia, Asia, Scandinavia and the
rest of Europe. Heaslam Group also registered in Alternative
Investment Market (AIM) on London Stock Exchange (LSE).
The company was founed in 1992 by Headlam. Headlam run 66
businesses across the United Kingdom and Continental Europe.
Each company uses its own sales team and trade brand while
39. receiving support from the group's network, central teams, and
resources (Headlam,2022).
The mission of the company is providing their customers
with service with unparalleled product, solutions and
knowledge. Furthermore, they were assured by certification
listed, ISO 45001, which is the world’s most popular standard
for occupational health and safety. As a consequence, the
business establishes itself as James Halstead PLC's legitimate
rival.
Financial Ratios Analysis
Profitability Ratios
Profitability is one for many financial matrices that used to
evaluate a company's potential to create profits over time, based
on information from a specific point in time, in relation to its
revenue, operating costs, balance sheet assets, or shareholders'
equity (AMY DRURY,2021). This report also compared
between the chosen company, James Halstead PLC, and
competitor company, Headlam Group, for 5 years, 2018 – 2022.
James Halstead PLC and Headlam profitability ratios are
summarized below.
44. Current Ratio
James Halstead PLC
2.94
2.75
3.18
2.69
2.44
Headlam Group
1.57
1.44
1.46
1.60
1.43
Quick Ratio
James Halstead PLC
1.60
1.63
1.86
1.81
1.18
Headlam Group
0.86
0.78
0.84
0.92
0.72
Cash Ratio
James Halstead PLC
1.10
1.11
46. 53.88%
Debt to equity
James Halstead PLC
52.94%
62.12%
57.39%
49.84%
55.65%
Headlam Group
91.05%
102.88%
112.45%
103.58%
116.82%
Times Interest Earned Ratio
James Halstead PLC
463.26%
450.5%
13.38%
Headlam Group
Corporate Governance Compliance
47. James Halstead PLC have selected to use the QCA code,
which developed by the Quoted Company Alliance and
published in 2018, as their model for excellent corporate
governance because they recognize how important effective
corporate governance is (James Halstead PLC,2022). The
strategy of James Halstead PLC aims to strengthen the brand
identity by generating and enhancing goodwill also customer
satisfaction in order to encourage ongoing repeat business. This
strategy aims to increase revenue, profitability, and cash flow
enabling the continuation of dividend payments and boosting
shareholder value. As a manufacturer, they offer items in large
quantities to distributors who are in charge of regional or local
delivery. A core company principle is that sales representatives
should be assigned specifically to presenting products to end
users and specifiers rather than stockiest (Anthony Wild,2022).
Compliance
According to James Halstead PLC Audit Committee Terms
of Reference, Article 29.2 of the Company's Articles of
Association established this Committee of the Board of
Directors as the Audit Committee. The "Group" in these terms
of reference refers to James Halstead PLC and its affiliates. The
committee shall have at least two members, at least one of
whom shall have recent relevant experience and competence in
accounting or auditing or both, nominated by the board from
among the independent non-executive directors of the company.
James Halstead PLC separate Group Chief Executive (CEO),
Mark Halstead, who was chosen in April 2002, and Non-
Executive Chairman, Anthony Wild, who was appointed in
March 2001, he is a well-known local businessman and a
professional accountant.
“The Board” comprises of one (1) Non-Executive
Chairman, one (1) Group Chief Executive, one (1) Group
48. Finance Director, one (1) Senior Independent Director, and two
(2) Independent Director. Moreover, James Halstead PLC also
have “Senior Management Team” which is comprises of one (1)
Corporate Development Director (James Halstead PLC’s
board,2020). James Halstead PLC believes that it is important to
take precautions to reduce the possibility of any conflicts of
interest that could be perceived as having an unfavorable
influence. If at all practicable, the Committee's chairman and
members ought to be switched out on a regular basis.
Nevertheless, on the board and corporate development director
consists of 7 without any woman represented on any positions,
it appears that the company does not respect diversity of
gender.Proposed Financial Strategies
The company should focus on improve all products that
they have by research customer satisfaction both satisfied and
dissatisfied. The company also should invent new goods and
technology which no one else be able to create. Once, James
Halstead PLC was the very first company who succeed created a
first of its kind vinyl sheet product, Polyflor. Author believed
that if they were success before, they would be able to achieve
it again. To ensure that the company is running at close to
optimal output, they should concentrate on enhancing
production processes employing the most recent technologies
and boosting the contributions from in-house manufacturing of
its products.
Planning for both the short and long future is always
necessary. Set minor goals that can help you reach your main
objective. Long-term sight is obstructed by the pandemic's
numerous uncertainties, but smaller goals can be set in order to
meet urgent needs while laying the groundwork for a more
ambitious project in the future.
50. Assessment Brief
Module Code
Module Name Financial Decision Making
Level 7
Module Leader Ewan Tracey
Module Code FINM036
Assessment title:
Written Assignment
Weighting: 50%
Submission dates: Please see NILE
Feedback and Grades
due: Please see NILE
1
Assessment Task
This assessment requires students to produce an individual
report analysing the performance and operations
of a publicly listed company within a selected sector. A list of
companies will be provided for students to
select from. This assessment represents 50% of the total marks.
51. Module Assignment Information
Due date: To be determined - UK semester 1 / overseas
assignment
due from 1st September 2022 to 31st August 2023
FINM036 Written Assignment
The aim of this assignment is to test students’ knowledge and
understanding of key accounting and
corporate finance concepts, theories and tools that can be used
to critically analyse organisations. It will also
test the ability to present non-financial information
Required:
You have been asked to write a report to the board of directors
of one of the selected companies below as
part of the interview process for your first appointment as a
Finance Director of a company listed on AIM
(which is the Alternative Investment Market for small
companies) within the London Stock Exchange (LSE).
The board of directors have asked you to write a report about
your vision and strategic financial goals for the
company.
The companies are within a selected sector of the AIM. Assume
that your selected company has ambitions
and plans to become a FTSE 100 (the largest UK listed
companies) company in the near future.
Guide:
You need to introduce the company, discuss the product or
services, location, turnover, number of
employees, etc. The report should be maximum 2,500 words (+/-
10%). Remember you need to make an
52. impression on the board of directors for you to be considered
for the critical post of Finance Director.
The essence of this assignment is to test your knowledge and
understanding of key accounting and
corporate governance concepts, theories and tools and ability to
present data in a concise manner.
Required:
You have been asked to write a report to the board of directors
of one of the selected companies below as
part of the interview process for your first appointment as a
Finance Director of a AIM company. The board of
directors have asked you to write a report about your vision and
strategic financial goals for the company.
The companies are within the AIM index. Assume that your
selected company wants to become a FTSE 100
(the largest UK listed companies) company in the near future.
Additional Guidance
You need to introduce the company, discuss the product or
services, location, turnover, number of
employees, the contribution of the sector to the UK economy.
To analyse, you need to compare the financial
data / ratios of your selected company with either a competitor
within the sector or the average of the sector.
2
The report should be maximum 2,500 words. Remember you
need to make an impression on the board of
53. directors for you to be considered for the critical post of
Finance Director.
Please note that you must select a company from the list below
for 2019/20
List of companies to select from for 2019/2020
Company Name ICB
Super-Sector
Country of
Incorporation
Market Company Market Cap
(£m)
ACCSYS TECHNOLOGIES PLC Construction &
Materials
United Kingdom AIM £87.65
BILLINGTON HOLDINGS PLC Construction &
Materials
United Kingdom AIM £37.25
EPWIN GROUP PLC Construction &
Materials
United Kingdom AIM £114.34
JAMES HALSTEAD PLC Construction &
Materials
United Kingdom AIM £848.53
54. MICHELMERSH BRICK HOLDINGS PLC Construction &
Materials
United Kingdom AIM £82.33
NEXUS INFRASTRUCTURE PLC Construction &
Materials
United Kingdom AIM £78.90
SIGMAROC PLC Construction &
Materials
United Kingdom AIM £56.46
VAN ELLE HOLDINGS PLC Construction &
Materials
United Kingdom AIM £72.80
Section A- 2000 words.
1. Analyse the performance of your chosen company using
relevant financial and non-financial ratios (5
years). Your analysis should include profit ratios, efficiency,
liquidity and other ratios that you
consider relevant.
Section B 500 words
1. Critically evaluate the company’s corporate governance
compliance and its impact on the brand and
reputation as reported in the press (print, online and social
media)
55. 2. Discuss the proposed medium term financial strategies for
your selected company to become a
FTSE100 company or for your company to become dominant in
the industry / sector.
Please note:
If you select a company outside of the list above, you will
automatically fail this part of the
assignment, unless you get a prior written approval from your
tutor.
You can use www.northcote.co.uk, pro-share and the FT to
identify companies within their sectoral
classifications. It is essential that all sources of information are
correctly referenced using the Harvard
system.
Word Limits
The word limit for this assignment is 2500 words (+/- 10%)
Where the submission exceeds the stipulated word limit by more
than 10%, the submission
will only be marked up to and including the additional 10%.
Anything over this will not be
included in the final grade for the assessment item. Abstracts,
bibliographies, reference
lists, appendices and footnotes are excluded from any word
limit requirements.
3
http://www.northcote.co.uk/
Where a submission is notably under the word limit, the full
56. submission will be
marked on the extent to which the requirements of the
assessment brief have been
met.
Assessment Learning Outcomes
The learning outcomes to be addressed through this assignment
are:
(a) Demonstrate a critical understanding of the nature and role
of the finance professional
and how financial control processes impact on the organisation
and its stakeholders.
(b) Critically evaluate the impact of the external context on the
financial domain, both
domestically and internationally.
(c) Identify, critically appraise and analyse the content,
relevance and use of key financial
accounting information and techniques, both within
organisations and by reference to
relevant research.
(d) Demonstrate the ability to evaluate critically and
communicate effectively the financial
performance of an organisation by reference to internal or
published financial information.
Assessment Grading Criteria
The marking criteria
57. Criteria Exceptional 70-100% A- to A+ Good C- to C+ Pass D-
to D+ Fail F- to F+
Introduction,
presentation
and refereeing
of the report
10%
7-10
Exceptional report. The
introduction is exemplary and
provides evidence of a complete
understanding of the company’s
activities. The industry and the
company analysed are outline
and justified clearly. The
significance of the industry and
comparative report is presented
clearly. There is clear evidence of
originality and ability to justify the
research effort. Compelling
evidence of research.
6 -6 points
Good: The introduction is
relevant and illustrates an
attempt to address the
assessment requirements.
The industry and company
are described in detail. The
rationale and comparative
data is limited. Good
rationale, but lacks the
details expected to score top
58. marks probably due to
general unsupported
statements or grammatical /
spelling mistakes.
5 to 5 points
Satisfactory: The
introduction shows
some correlation with
the project
requirements. There is
irrelevant information.
The rationale and
objectives are not
vague. Generally
descriptive. There is
very limited evidence of
research.
1 to 4 points
Fail. The introduction is
descriptive and irrelevant
The work lacks clear
justification of the report
purpose. Industry and
company choice are not
justified. Limited support
for the information given.
The student selected a
company not on the list
without approval
Application of
the theories
underpinning
the report
59. 20%
16to 20 points
Exceptional. A clear
demonstration of complete grasp
of knowledge of the key factors
that drive performance in the
chosen company and the industry
in general. Critical relevant
theories are identified such as the
application of PESTEL or any
other competition or management
theories to support your argument
must apply and critically appraise
the theories. Industry examples
13 to 15 points
Good: The analysis
demonstrates adequate
knowledge of a fair range of
the factors that affect
company performance.
There is intermittent
evidence of an appreciation
of the significance of the
factors to the industry being
analysed. Critical success
factors are outlined. Some
examples and limited
10 to 12 points
Satisfactory: The
analysis is largely
descriptive and narrative
with little evidence of
analysis. There is no
60. clear evaluation of how
the identified factors
affect the selected
company. Critical
success factors are
vague. Limited evidence
of research. Lack of
1 to 9 points
Fail: The analysis is not
linked to the company.
The analysis is
descriptive and generally
irrelevant to the company
Critical success factors
are not clear or missing.
No relevant examples are
presented. Little evidence
of research
4
Criteria Exceptional 70-100% A- to A+ Good C- to C+ Pass D-
to D+ Fail F- to F+
and published literature are used
to develop a logical case on the
relevance of the sector, its
importance and some key
financial indicators such as the
GDP contribution of the sector or
contribution to the country’s
economy over the past five years.
61. Theories such as the SWOT
analysis (strength, weaknesses,
opportunities and threats) within
the sector or PEST analysis
(Political, economical, social and
technological) impact of the
industry or sector
literature are used.
Contributions of the sector to
the county’s economy may
be missing
concrete supporting
evidence
The student selected a
company not on the list
without approval.
Depth of
research
including the use
of appropriate
ratios / explained
30%
22 to 30 points
Exceptional. The selected
financial ratios are clearly justified
within the context of the industry
being analysed. Selected
financial ratios for the past five
years are shown and clearly
presented and labelled in
appendices. Comparison to the
62. competitors financial and non
financial data or the sector
figures. The use of examples and
published literature to justify
choice of ratios is compelling. The
interpretation of financial ratios
and their importance
demonstrates complete grasp of
knowledge. Relevant examples
and references used in
discussion
18 to 21 points
Good: Financial ratios are
selected and outlined clearly.
Most of the financial ratios
for the past five years are
presented in appendices.
The interpretation and
justification of financial ratios
lack consistency. There is
intermittent evidence of an
understanding of the
significance of the financial
ratios. Some examples and
references are used in
discussion.
15 to 17 points
Satisfactory: Financial
ratios are stated but not
clearly justified.
Incomplete financial
ratios for the past five
years are presented in
appendices. A basic
63. argument is evident but
lacks clarity and
coherence. Limited
examples and
references used in
discussion
1 to 14 points
Fail: Financial ratios are
defined and described
with no justification.
Financial ratios for the
past five years are
incomplete or missing.
Insufficient evidence of
knowledge and research
No examples and lack of
cited published work.
The student selected a
company not on the list
without approval
Formulation of
an effective
summary of key
issues
and potential
actions/ changes
30%
22 to 30 points
Exceptional. The report
summarises the key elements
and brings out the compelling
reasons why potential investors
and other stakeholders should be
64. keen to invest in the company.
The strategic direction of the
company and key advice on
competitor’s analysis and the
future of the company when
compared to other sectors within
the economy.
The main CG rules and the
analysis of the company’s
compliance with corporate
governance rules such as rules
on diversity, effectiveness,
control, directors’ attendance at
board meetings
The arguments are logical and
backed up with supporting
evidenced that are within the
report. Exceptional comparisons
with competitors and advantages
are enumerated and clearly
stated including plan for future
financial strategy for the company
18 to 21 points
Good: A good attempt to
construct a coherent and
logical discussion of the
relevant issues. The report
shows some relevance and
justification but does not give
details on corporate
governance compliance by
the selected company
65. There is a lack of focus and
consistency in the
discussion. There is
tendency to narrate and
lacks analysis. Some
examples and limited
literature are used.
15 to 17 points
Satisfactory: Basic
understanding of the
report is understood, but
lacks coherent and
logical flow of the
discussion. Some of the
analysis are not
customised to the
selected company or
comparison made to the
industry.
Very descriptive outline
of company. Limited
analysis with no links to
industry. No or limited
CG compliance issue
1 to 14 points
Fail. Intermittent and
vague description of the
report requirements and
their impact on the
industry. The writing
rarely goes beyond
simplifying paraphrase o
66. the essential elements of
the requirements of the
report without adequate
justification or any
convincing demonstration
of essence of the report
No discussion of CG
rules or application of the
rules to the selected
company
5
Criteria Exceptional 70-100% A- to A+ Good C- to C+ Pass D-
to D+ Fail F- to F+
Conclusion
10%
7 to 10 points
Excellent. The conclusion is a
summative review of the report. The
evaluation is compelling,
interpretation is accurate and the
discourse is clear. Citation and
referencing is accurate, up-to-date
and well presented.
Justification for appointment into the
FD role
6 to 6 points
Good:. The conclusion is a
good review of the report. The
67. discussion is clear and orderly.
Citation and referencing is clear
throughout. No details on the
justification for the post
5 to 5 points
Satisfactory: The
conclusion is descriptive
and lacks analysis and
critical evaluation. Citation
and referencing is good in
some parts. Lacks the
reason for the appointment
as FD
1 to 4 points
Fail: The conclusion show a
lack of understanding of the
report requirement and
material presented in the
document. Conclusion has
some information that is
irrelevant to the report.
Citation and referencing is
incorrect / missing in most
parts
Generic Grading Criteria for Level 7
See grading criteria below
Assessment Support/Feedforward
Please look out for announcement on NILE on additional
support to help with your work. We
are unable to provide individual review of the draft of your
work
68. Assessment Submission
To submit, please go to the ‘Submit your work’ area on the
NILE site and use the AS1
submission point to upload your work. The deadline for this is
11.59pm (UK local time) on the
date of submission.
The work will be subject to Turnitin anti-plagiarism detection
software. Turnitin checks
student work for possible textual matches against internet
available resources and its own
proprietary database.
N.B Work emailed directly to your tutor will not be marked.
Late submission of work
Use either:
If an item of assessment is submitted late and an extension has
not been granted, the
following will apply:
● Within one week of the original deadline – work will be
marked and returned with full
feedback, and awarded a maximum bare pass grade of C-.
● More than one week from original deadline – maximum grade
achievable LG (L
indicating late).
Or, if a resit
Any work submitted late will be awarded a LG grade.
Extensions
Use either:
The University of Northampton’s general policy with regard to
extensions is to be supportive
69. of students who have genuine difficulties, but not against
pressures of work that could have
reasonably been anticipated. Please refer to Appendix I of the
Post Graduate Handbook for
advice on extensions.
Or, if a resit
6
There are NO extensions for resits
Feedback and Grades
Your grade and overall summary feedback will be available in
Grade Centre. Please also click
through to Turnitin for within text comments.
Academic Practice and Integrity
This is an individual assignment.
The University of Northampton policy will apply in all cases of
copying, plagiarism or any other
methods by which students have obtained (or attempted to
obtain) an unfair advantage.
Support and guidance on assessments and academic integrity
can be found on: SkillsHub:
https://skillshub.northampton.ac.uk/ . If a case of academic
misconduct is suspected the tutor
will apply a ZZ grade in NILE.
Mitigating Circumstances
For guidance on Mitigating circumstances please go to
https://www.northampton.ac.uk/about-us/governance-and-
management/university-policies-p
rocedures-and-regulations/ where under Student Issues you will
70. find detailed guidance on the
policy as well as guidance and the form for making an
application.
Please note, however, that an application to defer an assessment
on the grounds of mitigating
circumstances should normally be made in advance of the
submission deadline or
examination date.
7
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https://www.northampton.ac.uk/about-us/governance-and-
management/university-policies-procedures-and-regulations/
https://www.northampton.ac.uk/about-us/governance-and-
management/university-policies-procedures-and-regulations/
GENERIC GRADE CRITERIA
These are the criteria required to achieve each classification at:
Level 7
An
outstanding
Distinction
A+ Work which fulfils all the criteria of the grade below, but at
an exceptional
standard
A very strong
Distinction
A Work of distinguished quality which is evidenced by an
71. authoritative
comprehensive, detailed and systematic knowledge base and
understanding
for specialised area of study. A key feature will be the ability
to work with
creativity and originality using knowledge and insights at the
forefront of the
area of study. There will be a confident grasp of disciplinary
methodologies for
the discipline/area of study which will be consistently reflected
in both own
research and advanced scholarship, effectively integrating
advanced skills of
analysis, synthesis, evaluation and application on a firm
foundation of critical
facility. Work will be characterised by strong technical
expertise to high
professional standards, and there will be sustained evidence of
confident,
autonomous operation and judgment in complex and
unpredictable
professional situations both in relation to working with others
and in relation to
own functioning. Self-direction, creativity, practical
understanding will be
combined to demonstrate the qualities expected of an effective
self critical
independent learner exercising excellent measured judgment,
and will be a
consistent feature of work.
A clear
Distinction
A- Work of very good quality which displays most but not all of
the criteria for the
72. grade above.
An
outstanding
merit
B+ Work of highly commendable quality which clearly fulfils
the criteria for the
grade below, but shows a greater degree of capability in
relevant advanced
intellectual or specialised skills.
A very
strong
Merit
B Work of commendable quality demonstrating a detailed and
systematic
knowledge base and understanding in specialised areas,
informed by critical
awareness of current issues, research based/theoretical insights
at the
forefront of the area of study. This will be supplemented by a
good
comprehensive understanding of disciplinary methodologies
relevant to own
research or advanced scholarship, which will be reflected in
work which
integrates skills of advanced analysis, synthesis, evaluation and
application with
critical awareness. There will be some evidence of originality
in application of
skills/knowledge, underpinned by good technical expertise
which permits
confident, autonomous operation in a range of complex and
unpredictable
73. professional situations. The ability to work autonomously, as a
self critical
independent learner exercising good and considered judgment,
will be a
consistent feature of work.
A Merit B- Work of good quality which contains most, but not
all of the characteristics of
the grade above.
An
Outstanding
Pass
C+ Work which clearly fulfils the criteria for the grade below,
but shows a greater
degree of capability in relevant advanced intellectual or
specialised skills.
8
A Very Good
Pass
C Work of capable quality which clearly demonstrates a
systematic
understanding of knowledge in specialised areas and a critical
awareness of
current issues, research based/theoretical knowledge at the
forefront of the
area of study, together with a sound understanding of
methodologies
applicable to own research or advanced scholarship. There may
be limitations
74. to the application of this knowledge and/or conceptual
understanding of
advanced scholarship, but there will be evidence of critical
awareness in
relation to analysis, synthesis, evaluation and application. The
ability to
exercise initiative as an independent and self critical learner in
complex and
unpredictable professional contexts will be demonstrated, as
will threshold
levels of technical expertise, although the scope of expertise
may be limited.
A Pass C- Work of satisfactory quality which contains most, but
not all of the
characteristics of the grade above.
Fail F+ Work which indicates some evidence of a systematic,
coherent and
analytical engagement with key aspects of the field of study,
including
familiarity with current scholarship, and evidence of ability to
utilise specialised
skills, but which also contains significant limitations.
F Work that falls well short of the threshold standards in
relation to one or
more of knowledge, intellectual, subject based or key skills at
this level.
F- Work of poor quality which is based on only minimal
understanding,
application or effort. It will offer only very limited evidence of
familiarity with
knowledge or skills appropriate to the field of study at this
level.
75. AG Work submitted but academic misconduct proven and
penalty given was to
award AG grade
LG Work submitted but given an LG grade due to late
submission
NG Work submitted but work comprises no value
G Nothing presented
9
Billington Holdings Plc 1
1
UNIVERSITY OF NORTHAMPTON
FACULTY OF BUSINESS AND LAW
FINANCIAL DECISION MAKING
FINM036
ASSIGNMENT
REPORT ANALYZING THE PERFORMANCE
AND OPERATIONS OF BILLINGTON
78. Appendix
2………………………………………………………………………
……………….17
Billington Holdings Plc 3
3
Introduction
This statement is a financial analysis of the Billington Holdings
Plc, the organisation is
listed on the Alternative Investment Market (AIM) in the
London Stock Exchange, the ratios for
the past 5 years will be analysed, which will include
profitability, efficiency and liquidity.
Moreover, the company will be compared with a competitor
within the same industry, namely
Sigmaroc Plc. Therefore, the analysis will inform the
development of the company’s vision and
79. strategic financial goals as it anticipates on becoming a FTSE
100 company in the near future.
Lastly, the company’s corporate governance compliance and
brand impact and reputation will be
evaluated. Consequently, the comprehensive report will aim at
creating financial strategies for the
company to become a FTSE 100 company and dominate the
construction and materials industry
in the UK.
Company Overview
The company is located in South Yorkshire, United Kingdom,
and operates within the
construction services, construction equipment, and building
subcontractors sector (Lse, 2019).
Billington Holdings was established in 1989, and the stock were
listed on the London Stock
Exchange under the ticker BILN on November 3, 2000. The
company operates several
subsidiaries, including Billington Structures Limited and Peter
Marshall Steel Stairs Limited,
which predominantly focus on the structural steelwork
manufacturing and design (Marketline,
2020). In addition, the other subsidiary is Easi-Edge Limited,
which provides safety solutions and
80. barrier systems to the building sector. Notably, the company is
also involved in the manufacturing
of underground tunneling, road heading equipment, and the
construction of schools and power
stations ((BILN, 2020). In this regard, the organisation has
become one of the UK’s leading
Billington Holdings Plc 4
4
structural steelwork contractors because of its nearly 70 years’
professional experience within the
industry.
The company has a workforce of nearly 379 individuals,
and the chief executive officer is
Mark Smith, who has to lead the company since 2015 ((BILN,
2019). Because of this experienced
and skilled labor force, the company is capable of producing
complex structures over 12000
tonnes. Moreover, the organization has steel plants in Barnsley
and Bristol, which can produce
nearly 35,000 tonnes of fabricated steel per year. The company
also can service the UK market
81. and other strategic markets within the European Union.
Additionally, the company has the capacity
and expertise to provide edge protection solutions and safety
barriers for its customers’ labor force.
As expected, the company is also a leading fabricator of steel
staircase for residential, domestic,
and commercial buildings within the UK. Therefore, due to its
presence and vast experience in the
construction sector, the company has a competitive edge against
other players in the industry.
Equity Holdings
The Billington top ten shareholdes are summarised in the table
below based on the amount
of equities held and percentage of ownership. The top ten
shareholders hold 87.16% of the total
equity whereby the instituional stockholders and individual
stockholders account for 80.99% and
6.17% respectively.
Name Equities %
Gutenga Foundation 5,942,985 46.2%
Close Asset Management Ltd. 1,245,000 9.68%
Otus Capital Management Ltd. 1,000,000 7.78%
82. Billington ESOP 893,719 6.95%
GPIM Ltd. 638,020 4.96%
Cavendish Asset Management Ltd. 371,250 2.89%
IG Markets Ltd. 325,000 2.53%
John Stuart Gordon Non-Executive Director 282,270 2.19%
Andrea Jean Hardie 256,000 1.99%
Kathryn Jane Garnett 256,000 1.99%
11,210,244 87.16%
https://www.marketscreener.com/business-leaders/Andrea-Jean-
Hardie-082386-E/biography/
https://www.marketscreener.com/business-leaders/Kathryn-
Jane-Garnett-08237P-E/biography/
Billington Holdings Plc 5
5
The Billington equity holding are summarised below.
Votes Quantity of stock Float Company-owned shares Total
Float
Stock A 1 12,860,959 4,496,866.0 35% 0 0.0% 34.80%
83. Stock B 1 73,368 0 0% 0 0.0%
Statement
The Chairman’s statement reveals that Billington achieved
impressive performance
evidenced by substantial progress across all divisions regarding
the growth in revenues and profit
before tax as well a strong balance sheet (Annual Report, 2019).
The CEO statement validates that
the company reported strong performance and presents the
operational review of the Billington
Structures, Shafton Steel Services, firm’s commitment to health,
safety, sustainability, people as
well as the steel industry and prospects and outlook (BILN,
2020).
Competition
One of the key strategic competitors of Billington Holdings
PLC is Sigmaroc PLC. Both
companies operate in the construction material space within the
UK and the European Union.
Notably, Sigmaroc PLC is registered in AIM and has a
deliberate understanding of the construction
84. material industry. The company’s Chief executive Chairman is
David Barret, who has incorporated
a solid strategy and operational expertise within the sector. As a
consequence, the company proves
to be a worthy competitor to Billington holdings PLC (Sigmaroc
Annual Report). Both companies
have tapped into their pool of experienced and skilled labor
force to remain dynamic and
competitive.
Billington Holdings Plc 6
6
Theorectical Basis
Billington has been experiencing considerable growth in the
financial performance as
evidenced by revenues and high profits. This can be attributed
to the firm's strengths that include
delivery of diverse projects across varied sectors, like
distribution, high-end residential, leisure.
Another strength is the strong reputation in the market, which
has led to the record order books
85. that encourage a pipeline of opportunities. In addition, the
company's strengths are the cost savings,
low debt financing, higher efficiency in production, strong
liquidity, and capital positions. The
Group is well-positioned delivers higher growth in the future,
but the main weaknesses are limited
product offerings, minimal international presence, higher input
costs, and other expenses. The
external environment consists of promising prospects of growth
in the industry that offer various
opportunities that can drive the company's growth in the future.
They include responsible sourcing
and sustainable supply chains, global trade, pioneering
technological advancements, the advent of
the circular economy, and UK Export support mechanisms.
Finally, several threats pose a threat
to the company, such as fluctuations and volatility in steel
prices as well as the Depletion of high-
grade raw materials (Lambotte et al. 2018). The UK's departure
from the EU leads to interruptions
of supply, pressures on solid waste management, and an
increasingly competitive environment that
could hinder the future growth of Billington Holdings.
86. Billington Holdings Plc 7
7
Financial Ratios Analysis
Profitability Ratios
These ratios are used to indicate an organisation’s ability to
generate profits from existing
operations. Thus, the focus is predominantly on the company’s
return on investment from
inventory or assets. The information is critical, especially for
investors who seek information on a
company’s profitability capacity. Billington Holdings’
profitability over the past five years will be
analysed using the gross margin, profit margin, return on assets,
and return on equity ratios.
2014 2015 2016 2017 2018
Profita
bility
88. Return on
assets
Billington
Holdings
5.40% 7.48% 8.30% 8.64% 9.09
%
Sigmaroc PLC -125.20% -359.61% -706.29% 0.44% 4.31
%
Return on
Equity
Billington
Holdings
10.10% 14.93% 15.80% 15.94
%
17.27
%
Sigmaroc PLC -242.97% -404.03% 168.09% 0.70% 6.69
%
Since 2014, Billington has seen a considerable growth in
performance owing to consistent
89. investments and improved business environment, as evidenced
by high profitability ratios relative
to the Sigmaroc PLC and industry margin averages. The gross
margin declined since growth in
revenues (71.31%) was higher than gross profit (56.94%). The
revenues increased primarily due
to the surge in Billington Structures output. At the same time,
gross profit declined at a slower rate
due to pricing pressures, the uncertainty of ongoing and
uninterrupted supply of products.
Contrastingly, the net margin increased since net profit
increased by 180.21%, which was
considerably higher than the 71.31% increase in revenues. In
2018, the revenue raised to £77.3
Pawanrat Meepian
Billington Holdings Plc 8
8
million (2014: £45.103 million), and profit increased to £4.05
million (2015: 1.45 million) both
are record values (Annual Report 2018). The ROA and ROE
also increased substantially since the
90. net profit growth surpassed the increase in total assets (66.67%)
and owners’ equity (63.95%).
This is attributed mainly to the successful delivery of diverse
projects across a significant number
of sectors, like distribution, education, commercial, high-end
residential, sports, and leisure. The
firm recorded remarkable performance across all divisions, as
evidenced by record order books,
promising pipeline of opportunities, and costs savings. The
Group is well-positioned deliver higher
growth in the future.
Efficiency Ratios
Efficiency ratios are used in measuring Billington’s ability to
utilize its asset base and
manage short-term liabilities effectively by assessing how
efficiently the Group uses its assets in
generating sales revenues while managing assets (McLaney and
Atrill, 2018). The Group’s
efficiency will be analyzed using the inventory turnover, asset
turnover, and accounts
receivables turnover ratio and compared to its competitor and
industry average.
91. 2014 2015 2016 2017 2018
Inventory Turnover Billington Holdings 3.26 3.42 3.95 4.30
4.15
Efficiency
Ratios
Sigmaroc PLC n/a n/a n/a 4.76 6.15
Asset Turnover Billington Holdings 1.69 1.74 1.77 1.81 1.73
Sigmaroc PLC 1.56 0.13 0.11 0.33 0.49
Receivables Turnove
r
Billington Holdings 8.88 10.68 11.35 12.90 10.27
Sigmaroc PLC 5.18 1.36 0.23 5.80 6.38
In the past five years, the Group recorded an increase in
efficiency in the management of
the inventory, account receivables, and total assets, as
illustrated by the steady rise in all efficiency
ratios. Billington outperformed Sigmaroc PLC and industry in
terms of the asset turnover and
92. accounts receivables turnover but, the inventory turnover was
slightly below the peers in the
industry. The inventories, accounts receivables, and total assets
increased by 42%, 48%, and 67%
https://www.investopedia.com/terms/r/receivables.asp
Pawanrat Meepian
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Pawanrat Meepian
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Billington Holdings Plc 9
9
as the business enjoyed an increase in activity levels in the past
five years. Thus, the accounts
93. receivables turnover increased from 8.9 to 10.27, which means
that the Group is now collecting
its receivables more than ten times annually. The upward trend
denotes higher efficiency that is
favorable from the cash flow viewpoint since the cash is
collected sooner and is used in settling
obligations. Likewise, the increasing inventory turnover means
that the Group is efficiently
controlling its merchandise and effectively selling its inventory.
But, in 2018, there was a slight
decline in inventory turnover due to the UK’s imminent
departure from EU and the allied
uncertainty that has undoubtedly presented challenges in the
supply of products since the Group
sources some of its products from Europe through
subcontractors and suppliers
Liquidity Ratios
The liquidity ratios are used in the measurement of the
Billington’s capacity of meet its
current debt obligations by paying off its current liabilities once
they are due (Fridson 2011). The
Group’s liquidity will be appraised using the cash, current, and
94. acid test ratios.
2014 2015 2016 2017 2018
Liquidity
Ratios
Current Ratio Billington 1.43 1.34 1.43 1.49 1.47
Sigmaroc 1.69 0.98 0.19 1.50 1.75
Acid Test Billington 0.74 0.57 0.77 0.83 0.86
Sigmaroc 1.69 0.98 0.19 1.08 1.19
cash ratio Billington 0.32 0.19 0.40 0.48 0.47
Sigmaroc 0.60 0.12 0.10 0.65 0.44
The liquidity analysis demonstrates that the Group’s liquidity
increased in the last five
years since the cash, current, and acid-test ratios increased
considerably. However, the current and
acid-test ratios are lower than Sigmaroc PLC and industry
average. In terms of the cash ratio,
Billington Holding outperformed Sigmaroc PLC and peers in the
industry. The increasing liquidity
95. Pawanrat Meepian
Billington Holdings Plc 10
10
rations can be attributed to the fact that the increase in current
assets (66%) surpassed the growth
in current liabilities (61%). The 66% increase in current assets
included the increase in inventories,
42%, trade, and other receivables 48%, as well as growth in
cash balances (140%). Whereas, the
total rise of £7,457, 000 in current liabilities mainly comprised
a growth in trade and other payables
following a considerable increase in the activity levels. In 2018,
the Group reported net cash
inflows amounting to £1.20 million resultant in gross cash
balance worth £9.30 million, meaning
that the company has adequate funds to cover its working
capital requirements along with funding
opportunities as soon they arise in the future.
Gearing Ratios
The gearing ratios are used in measuring the financial leverage
96. of the Group by assessing
the degree of the interest-bearing liabilities in the company
capital structure (Subramanyam 2014).
2014 2015 2016 2017 2018
Gearing
Ratios
Debt to
equity (D/E)
Billington 1.95% 15.22% 10.67% 8.73% 6.40%
Sigmaroc 40.70
%
123.53% -
123.80%
61.52% 55.24%
Interest
coverage
Billington 82.57 118.62 173.86 260.47 86.22
97. Sigmaroc 39.61 311.14 210.05 7.82 -10.92
Debt to assets Billington 1.04% 7.63% 5.60% 4.73% 3.37%
Sigmaroc 20.97
%
109.95% 520.18% 38.09% 35.58%
The Group’s debt to equity and debt to assets ratios increased
in 2015; since then, the ratio
has declined from 15.22% to 6.40%. The debt to equity and debt
to assets metrics are much lower
than the Sigmaroc PLC and industry average, which implies that
the company uses less debt
funding relative to peer companies in the industry. In 2018, the
debt to equity and debt to assets
Billington Holdings Plc 11
11
were 6.40% and 3.37%, which implies the liabilities account for
only 6.40% of the equity and
4.37% of the total assets. Since 2014, the non-current debt
increased by 437.63%, while the
98. owners’ equity increased by 63.95% (Annual Report 2013). But,
the higher interest coverage ratio
proves that Billington can service its debt because the company
is making sufficient money to pay
its interest as well as principal payment on existing debt. The
interest average ration is too high,
meaning that the company can offset interest on debt with no
chances of defaulting. The
conservative funding policy signifies that the company has
lower financial risks to debt funding
and higher costs of servicing the debt in comparison to the peers
in the industry (Editorial, 2020).
The analysis of the gearing ratios denotes that the company uses
investor funding and a modest
level of debt to invest in the Group’s factories and sites to
ensure that the company continually
improve its operational and financial performance.
99. Billington Holdings Plc 12
12
Corporate Governance Compliance
Good corporate governance is one of the core values upheld as
it is a requirement in the
standards of the AIM-listed entities. The Group has undertaken
a serious approach in safeguarding
that the Board of directors applies the Quoted Companies
Alliances Corporate Governance Code
that is used in the regulation of the Small and Mid-sized Quoted
Companies (Quoted Companies
Alliance 2013).
Compliance
The evidence of compliance with the corporate governance
standards involves the
separation of the role of the CEO (Mark Smith) and Non-
Executive Chairman (Ian Michael
Lawson) (Mallin 2013). The Chairman is accountable for
leading the Board, facilitating the
contribution of members, and ensuring that the Board operates
100. in the shareholders’ interest. The
CEO is liable for business leadership and the implementation of
the core strategy. The Board
comprises of two (2) Executive and three (3) Non-Executive
Directors, and the Board chair is the
Non-Executive Chairman; hence, the representation of the Non-
Executive to Executive Directors
in the company’s Board is 60% and 40% respectively.
According to Thornton (2018), The Board
meets officially 11 times yearly and on ado basis if necessary.
In the past fiscal year, the board
attendance was Mark Smith (11/11-100%), Trevor Taylor 11/11-
100%), Peter Hems (11/11-
100%), John Gordon (10/11-91%), Doctor Ospelt (2/11-18%),
and Stephen Wardell – 0/0
(appointment January 2019). However, the company does not
observe gender and diversity since
the Board consists of 7 with no women representation on the
company’s Board. The Non-
Executive Directors are viewed by the Board as independent of
the company’s management as
they bring experience welcomed by Executive Directors.
Consistent with the corporate governance
structure, the Board has formed an Audit and Remuneration
101. Committees. As a result, Billington
Billington Holdings Plc 13
13
Holdings’ adherence to corporate governance standards has had
a positive impact on the Billington
brand and reputation in the steel industry (Billington Holdings
PLC. 2020).
Proposed Financial Strategies
The company should focus on improving the production
methods using the latest
technologies and increasing the contributions from in-house
manufacturing of its products to
ensure that Billington Structures and Shafton Steel Services are
operating at the near-optimal
output. The increased production will support the record order
book that has been demonstrated in
recent years while ensuring that the business is well aligned to
deliver revenues in the medium and
long-term. The Group should increase its sales efforts by
focusing more on securing more
extensive and diversified contracts with partner clients across
102. all segments to generate higher sales.
The company should explore cheaper debt funding options for
funding further investments in a
substantial capital expenditure program in Billington’s core
products, better utilization, as well as
new customer, wins to maximize opportunities in the industry,
and drive growth.
The Group should continue seeking cost savings and improved
utilization where suitable
to enhance the sustainability of the company’s gross and net
profit margins. There are margin
pressures within the global structural steel markets. However,
prospects point towards added
growth driven by growing demand (International Iron and Steel
Institute 2017). The Group should
also remain alert to continuously evolving economic and
political uncertainties like the Brexit by
aiding in the development and implementation of suitable
measures that are aimed at identifying
and addressing the risks presented to each aspect of the
business. The company should undertake
projects in other countries in emerging economies to lower the
present risks of delay in
construction projects, cost fluctuations of the inputs as well as
103. the uncertainty of quantum of
revenues in the U.K markets. The implementation of these
strategies will result in additional years
of growth and progression for the Billington Group in the near
and long-term.
Billington Holdings Plc 14
14
Reference
1. Bilington Holdings PLC.(2020) (n.d.). Retrieved Jan 9, 2020,
from Bloomberg:
https://www.bloomberg.com/profile/company/BNGHF:US
2. (BILN), B. (2020). About Billington Holdings PLC (BILN) -
Investing.com. [online]
Investing.com. Available at:
https://www.investing.com/equities/billington-holdings-plc-
company-profile [Accessed 09 Jan. 2020].
3. Billington Holdings Plc (BILN). (2020). Retrieved Jan 9,
2020, from Market Screener:
https://www.marketscreener.com/BILLINGTON-HOLDINGS-
PLC-4001636/company/
104. 4. Billington Holdings Plc (2019). Company Profiles: Billington
Holdings Plc. Business
Source Premier.
5. Billington Holdings Plc (BILN). (2019). Report and Finanical
Statements for the year
ended 31 December 2018. Retrieved Jan 9, 2020,
https://billington-holdings.plc.uk/wp-
content/uploads/2019/11/BH_Report_and_Financial_Statement_
Year_Ended_2018_WE
B_SP-2.pdf.
6. Billington Holdings PLC. (2020). Board Profile - Billington
Holdings PLC. [online]
Available at: https://billington-holdings.plc.uk/aim-
information/board-profile/ [Accessed
10 Jan. 2020].
7. Eddie McLaney and Peter Atrill, (2018), Accounting and
Finance: An Introduction 9th
edition.
8. Editorial, R. (2020). BILN.L - Billington Holdings PLC
Profile | Reuters. [online]
Uk.reuters.com. Available at:
https://uk.reuters.com/companies/BILN.L/profile [Accessed
10 Jan. 2020].
108. Total shareholders' equity 14,304 16,368 18,799 21,976 23,451
54,129 63.95%
Inventories and work in progress 8,472 10,568 9,865 11,012
12,011 4,844 41.77%
Trade and other receivables 5,080 5,315 5,581 5,700 7,527
6,467 48.17%
Cash and cash equivalents 3,872 2,611 6,033 8,063 9,311 3,772
140.47%
Current Assets 17,424 18,494 21,479 24,775 28,849 15,083
65.57%
Total current liabilities 12,152 13,800 14,996 16,670 19,609
8,600 61.36%
Operating profit 1899 3084 3,825 4,428 5,001 11,436 163.35%
Interest 23 26 22 17 58 1046 152.17%
Borrowings (non-current) 279 2,492 2,005 1,918 1,500 21300
437.63%
109. Billington Holdings Plc 17
17
Appendix Two: Formula
Profitability Ratios
Gross Margin Net Margin ROE ROA
Formula Gross profit / Revenue x 100
Profit (loss) for the
year / Revenue x 100
Profit after (loss) tax *
/ Total Owner’s
Equity x 100
Profit after (loss) tax /
Total Assets* x 100
Efficiency Ratios
110. Asset Turnover Inventory Turnover Accounts Receivable
Turnover
Formula Total Assets /
Revenue
Inventory / Cost of
sales x 365
Trade receivables * /
Revenue
Liquidity Ratios
Current Ratio Acid Test Ratio Cash Ratio
Formula Current assets / Current
liabilities
Current assets
excluding inventory /
Current liabilities
Cash and cash
equivalents / Current
111. liabilities
Gearing Ratios
Debt to Equity
Net Interest coverage
ratio
Debt to Assets
Formula Borrowings (non-current) /
Total equity x 100
Operating profit (loss)
/ Net Interest
(Finance) expense
Borrowings (non-
current) / Total Assets
x 100
112. [removed]
Chapter 5: Price Discrimination: Linear Pricing
*
Price Discrimination and Monopoly: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
IntroductionPrescription drugs are cheaper in Canada than the
United StatesTextbooks are generally cheaper in Britain than
the United StatesExamples of price discriminationpresumably
profitableshould affect market efficiency: not necessarily
adverselyis price discrimination necessarily bad – even if not
seen as “fair”?
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
Feasibility of price discriminationTwo problems confront a firm
wishing to price discriminateidentification: the firm is able to
identify demands of different types of consumer or in separate
marketseasier in some markets than others: e.g tax consultants,
113. doctorsarbitrage: prevent consumers who are charged a low
price from reselling to consumers who are charged a high
priceprevent re-importation of prescription drugs to the United
StatesThe firm then must choose the type of price
discriminationfirst-degree or personalized pricingsecond-degree
or menu pricingthird-degree or group pricing
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
Third-degree price discriminationConsumers differ by some
observable characteristic(s)A uniform price is charged to all
consumers in a particular group – linear priceDifferent uniform
prices are charged to different groups“kids are
free”subscriptions to professional journals e.g. American
Economic Reviewairlinesthe number of different economy fares
charged can be very large indeed!early-bird specials; first-runs
of movies
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
Third-degree price discrimination 2The pricing rule is very
simple:consumers with low elasticity of demand should be
charged a high priceconsumers with high elasticity of demand
should be charged a low price
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
114. Third degree price discrimination: exampleHarry Potter volume
sold in the United States and EuropeDemand:United States: PU
= 36 – 4QUEurope: PE = 24 – 4QEMarginal cost constant in
each marketMC = $4
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
The example: no price discriminationSuppose that the same
price is charged in both marketsUse the following
procedure:calculate aggregate demand in the two
marketsidentify marginal revenue for that aggregate
demandequate marginal revenue with marginal cost to identify
the profit maximizing quantityidentify the market clearing price
from the aggregate demandcalculate demands in the individual
markets from the individual market demand curves and the
equilibrium price
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
The example (npd cont.)
United States: PU = 36 – 4QU
Invert this:
QU = 9 – P/4 for P < $36
Europe: PU = 24 – 4QE
Invert
QE = 6 – P/4 for P < $24
Aggregate these demands
Q = QU + QE = 9 – P/4 for $36 < P < $24
At these prices only the US market is active
Q = QU + QE = 15 – P/2 for P < $24
115. Now both markets are active
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
The example (npd cont.)
Invert the direct demands
P = 36 – 4Q for Q < 3
P = 30 – 2Q for Q > 3
$/unit
Quantity
15
36
30
Marginal revenue is
MR = 36 – 8Q for Q < 3
MR = 30 – 4Q for Q < 3
Demand
MR
Set MR = MC
MC
Q = 6.5
P = $17
6.5
17
Price from the demand curve
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
The example (npd cont.)
Substitute price into the individual market demand curves:
116. QU = 9 – P/4 = 9 – 17/4 = 4.75 million
QE = 6 – P/4 = 6 – 17/4 = 1.75 million
Aggregate profit = (17 – 4)x6.5 = $84.5 million
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
The example: price discriminationThe firm can improve on this
outcomeCheck that MR is not equal to MC in both marketsMR >
MC in EuropeMR < MC in the USthe firms should transfer some
books from the US to EuropeThis requires that different prices
be charged in the two marketsProcedure:take each market
separatelyidentify equilibrium quantity in each market by
equating MR and MCidentify the price in each market from
market demand
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
The example: price discrimination 2
Demand in the US:
PU = 36 – 4QU
$/unit
Quantity
Demand
Marginal revenue:
MR = 36 – 8QU
36
9
MR
MC = 4
MC
117. 4
Equate MR and MC
QU = 4
Price from the demand curve
PU = $20
4
20
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
The example: price discrimination 3
Demand in the Europe:
PE = 24 – 4QU
$/unit
Quantity
Demand
Marginal revenue:
MR = 24 – 8QU
24
6
MR
MC = 4
MC
4
Equate MR and MC
QE = 2.5
Price from the demand curve
PE = $14
2.5
14
Chapter 5: Price Discrimination: Linear Pricing
118. Chapter 5: Price Discrimination: Linear Pricing
*
The example: price discrimination 4Aggregate sales are 6.5
million booksthe same as without price discriminationAggregate
profit is (20 – 4)x4 + (14 – 4)x2.5 = $89 million$4.5 million
greater than without price discrimination
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
No price discrimination: non-constant costThe example assumes
constant marginal costHow is this affected if MC is non-
constant?Suppose MC is increasingNo price discrimination
procedureCalculate aggregate demandCalculate the associated
MREquate MR with MC to give aggregate outputIdentify price
from aggregate demandIdentify market demands from individual
demand curves
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
The example again
Applying this procedure assuming that MC = 0.75 + Q/2 gives:
121. 0
5
10
15
20
0
10
20
30
40
D
MR
MC
24
6.5
17
Price
(c) Aggregate
Quantity
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
*
Price discrimination: non-constant costWith price
discrimination the procedure isIdentify marginal revenue in
each marketAggregate these marginal revenues to give
aggregate marginal revenueEquate this MR with MC to give
122. aggregate outputIdentify equilibrium MR from the aggregate
MR curveEquate this MR with MC in each market to give
individual market quantitiesIdentify equilibrium prices from
individual market demands
Chapter 5: Price Discrimination: Linear Pricing
Chapter 5: Price Discrimination: Linear Pricing
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The example again
Applying this procedure assuming that MC = 0.75 + Q/2 gives:
Price
(a) United States
Quantity
0
5
10
0
10