The objective is to identify the relationship between supply and demand. For instance, there are many industries where the maximum number of consumers that can be served is a fixed number in the short run. An airline only has so many seats on a plane and a fixed number of planes. A stadium has an unalterable number of seats. In most of the industries with a fixed maximum quantity, the marginal cost of one additional sale is small - one additional passenger on an airplane will cause the airplane to use a little more fuel, in this case, the additional cost is small. So, for most firms with a fixed maximum, it is relatively easy to determine the optimal number of sales: if the marginal revenue is larger than the marginal cost of the last good, then the firm should sell all its inventory.

The first assignment is to examine an industry of my choice using the Five Forces.

a. Do you think it is an attractive industry? Why or why not?

2. Second, beauty salon owners have recently started offering teeth whitening services to clients in addition to their more standard services. In several states, regulators have ordered salon owners to stop, claiming that this service constitutes the practice of illegal dentistry.

a. What group do you think might expect to be behind the state's efforts to ban salons from providing teeth whitening services? Why? What could the beauty salon do differently?

3. Last, parking at Your Favorite NFL Team Stadium.

a. What would efficient revenue management imply for the pricing of the stadium parking lot at your favorite NFL team on typical game days?

b. How about for the Super Bowl?

c. How about for the many smaller events that fill less than half to lot?