Assesment 3
1. Is gross profit or net profit more important to consider when you're deciding how successful and profitable a company is? Why? Explain. Net profit is more important than gross profit because gross profit is what you make before the government charges you taxes on that money.
2. Choose a well-known company that you know of, and describe its direct and indirect competitors. Describe at least 2 direct competitors and 2 indirect competitors. Wal-Mart is a very big groceries store and has many different competitors. Two direct competitors of Wal-Mart are Kmart and Target. Two indirect competitors are eBay, Amazon and anyone selling store that offers great value prices.
3. Describe at least 3 nonprice competition strategies a company could use to convince customers that its product is better than other similar products. Why would those strategies matter to customers? Packaging, advertising and labels on a product will give the customer all the information it needs to know about the product and can convince them to buy it.
4. Describe a nonprice competition strategy that you have seen a company use. Do you think this strategy was effective? Why or why not? I have seen Wal-Mart give buy one get one free products. This is a good strategy because it gives the customer the chance to get a second item for free.
5. If all other factors are equal, what is likely to happen to the supply of a product if the price goes up? Why? Explain. If the price goes up on a product the product quantity will rise because no one will buy at a higher price.
6. If all other factors are equal, what is likely to happen to the demand for a product if the price goes down? Why? Explain. If the price of a product goes down the demand will rise because the product is cheaper.
7. Describe a real or made up but possible example of a product that went through a time of scarcity. What was likely to happen to the price of the product when it was scarce, and why? AIR MAGS were a shoe made by NIKE. It
2. Choose a well-known company that you know of, and describe its direct and indirect competitors. Describe at least 2 direct competitors and 2 indirect competitors. Wal-Mart is a very big groceries store and has many different competitors. Two direct competitors of Wal-Mart are Kmart and Target. Two indirect competitors are eBay, Amazon and anyone selling store that offers great value prices.
3. Describe at least 3 nonprice competition strategies a company could use to convince customers that its product is better than other similar products. Why would those strategies matter to customers? Packaging, advertising and labels on a product will give the customer all the information it needs to know about the product and can convince them to buy it.
4. Describe a nonprice competition strategy that you have seen a company use. Do you think this strategy was effective? Why or why not? I have seen Wal-Mart give buy one get one free products. This is a good strategy because it gives the customer the chance to get a second item for free.
5. If all other factors are equal, what is likely to happen to the supply of a product if the price goes up? Why? Explain. If the price goes up on a product the product quantity will rise because no one will buy at a higher price.
6. If all other factors are equal, what is likely to happen to the demand for a product if the price goes down? Why? Explain. If the price of a product goes down the demand will rise because the product is cheaper.
7. Describe a real or made up but possible example of a product that went through a time of scarcity. What was likely to happen to the price of the product when it was scarce, and why? AIR MAGS were a shoe made by NIKE. It