Cardinal Rooters, Inc. (CRI) manufactures and sells a broad range of Louisville Cardinal paraphernaliasweatshirts, underwear, purses, etc. Over the years, while CRI has never really prospered, it has survived. CRI is just one of 14 equal sized firms that manufacture and sell these items to Louisville students and fans. The clothing lines of these different firms are just about indistinguishableall emphasizing a lot birds and the color red. Recently, CRI concluded that it might make a lot of sense to acquire two or three of its competitors. Will these acquisitions be a source of above average returns for CRI? Why or why not?

		Yes, because CRI will gain market power
		No, because it will not generate perfect competition
		No, because there would be effective barriers to entry.
		Yes, because of economies of scale
		Yes, because there a lot loyal Cardinal fans

13.3 points

Question 2

Is the Cardinal paraphernalia industry attractive?

		Yes, CRI is going to make a lot of money if the employees will work harder.
		A person's persistance and drive will determine success in an industry like CRI's.
		It is a very attractive industry as evidence by all the similar firms.
		Yes, because it has as low level competition
		No, the industry is perfectly competitive

13.3 points

Question 3

What model do we use to determine industry attractiveness?

		Hypercompetition
		Perfect competition/imperfect competition
		Five forces model
		Consolidated/fragmented
		Strategic groups

13.4 points

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