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Bank99 is introducing its first credit card. The plots below show the market for the card with consumers (side A) and merchants (side B). There
Bank99 is introducing its first credit card. The plots below show the market for the card with consumers (side A) and merchants (side B). There are several points marked on the plots, which show different kinds of possible expectations as the card is introduced. (a) On the graph above, label each of the two curves. (b) On the graph above, for each point 1-7, draw two arrows coming off the circle, with each arrow showing the way one side will be "pulling" the system. For example, would show that its being pulled "right" by side X and "down" by side Y. (In fact, you'll want to use "A" and "B" instead of "X" and "Y".) (c) Of the seven points shown, which would eventually lead to a successful product? 1 2 3 4 5 6 7 (d) Of the seven points shown, which would eventually lead to product failure? 1 2 3 4 5 6 7 (e) If you were Bank99, would you rather be at point 2 or point 3? 2 3 Why? (Either could be valid, it really depends on your reasoning.) (f) On the graph, show what would happen if Bank99 raised the price for consumers. Bank99 is introducing its first credit card. The plots below show the market for the card with consumers (side A) and merchants (side B). There are several points marked on the plots, which show different kinds of possible expectations as the card is introduced. (a) On the graph above, label each of the two curves. (b) On the graph above, for each point 1-7, draw two arrows coming off the circle, with each arrow showing the way one side will be "pulling" the system. For example, would show that its being pulled "right" by side X and "down" by side Y. (In fact, you'll want to use "A" and "B" instead of "X" and "Y".) (c) Of the seven points shown, which would eventually lead to a successful product? 1 2 3 4 5 6 7 (d) Of the seven points shown, which would eventually lead to product failure? 1 2 3 4 5 6 7 (e) If you were Bank99, would you rather be at point 2 or point 3? 2 3 Why? (Either could be valid, it really depends on your reasoning.) (f) On the graph, show what would happen if Bank99 raised the price for consumers
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