es in demand will increase shart-run profits but not necessarily long run 7. Price is not the only variable of competition Managers with differentia ed products and budgets for promotion seek to control in a limited way the position of demand curves for their products and services. Some firms spend large amounts on developing and merchandising new products. Others may respond to a price cut of a competitor by increas ing their TV ads. In numerous ways the marketing of differentiated foods by processors is quite different from the marketing of commodi ties by farmers 8. Although our discussion focused on sellers, it is important to realize that buyers also operate in various environments that are similar to those of sellers Buyers are constrained by the market in which they operate and by shifts in demand and costs. Why is it more difficult to predict the impact on price of a dead ligopoly than in perfect competition! 10. Sam Browne operates a little restaurant on Main Street. Hences Browneburgers at the same price as the popular four-ounce hamburg ers of the fast-food restaurant out on the highway, is Sama price ora price take? Do you see any advantages to Sam in adopting such a pricing strategy? 11. Why do most firms strive to become oligopolists? How might this affect a market over time is the impact different in different markets! CLASS EXERCISE STUDY QUESTIONS In your commodity group, use the agricultural commodity assigned in Chapter 1 and choose one agribusiness from your answer to Question of the Chapter 1 exercise. Investigate the agribusiness, and identify the following aspects: 1. Site 2. Sales 3. Scope of product line 4. Worth (if public 5. Number of employees 6. Locations globally 7. Market structure may be multiple because firms are multi-product, so choose one product) 8. Industry sector Prepare to present your findings to the class. 1. Of what use is a market model? How do we relate it to reality? 2. Why does perfect competition simplify both marketing and procurement for a manager? 3. What is meant by the entry and exit of firms? Why are entry and exit easy or difficult in the various market models? 4. How do demand curves vary in the different market models? How does each affect managerial behavior and planning? 5. What is a supply and demand model? 6. Suppose that through some cultural revolution one-half of Americans became vegetarians and would no longer eat any kind of meat. Assume that beef producers compete in perfect competition, and use supply and demand curves to explain the impact. What would happen in the short run to beef prices and the profits of beef producers? In the long run? 7. Which of the following are standardized commodities, and which are dif. ferentiated products? hard red winter wheat oranges Wheaties Arrow shirts Folgers coffee packaged cake mixes cigarettes potatoes What kind of market power is possessed by a firm that has a highly differ- entiated product? com
