MONSANTO

This is an ECONOMICS class.This means use ECONOMIC TERMINOLOGY, CONCEPTS AND DIAGRAMS!

Directions / questions to answer for individual case studies

Monsanto:There are three questions at the end.These are repeated here.

a."How do you know that cutting the price of Roundup was a good idea for Monsanto?"

b."How might you estimate the elasticity of demand and the profit-maximizing price for 1995. Do you think Monsanto set the right price?" What is the appropriate market structure?Does this change?

c."If cutting price was a good idea, why didn't Monsanto do it earlier?" NEED HELP WITH THIS QUESTIONS

Key concepts

1)Examine the market structure(s).Does it stay consistent or not?

2)In a.) above, for any firm a "good idea" must do what?Show this.Don't just go with general comments.You might be better off answering b. first.

QUANTIFY HERE.You can do it with the information!

3)For b. - do not just estimate elasticity for 1995 (think: over time!!).How does estimating the elasticity of demand help you to answer a. & c.?

QUANTIFY HERE.You can do it with the information!

4)For b. - think markup power!

5)For c. - This is not only the market structure but economies of scope, economies of scale, and learning effects.Make sure these are included in your answer