Author Question: Wealth creating transactions are less likely to occur a. Without private property rights b. ... (Read 45 times)

londonang · **on:** Jul 1, 2018

Wealth creating transactions are less likely to occur
a. Without private property rights
b. Without contract enforcement
c. Both a and b
d. None of the above

Question 2

Mutual Fund Products Amplitude Investments offers a variety of mutual fund products for investors with different preferences. When they develop a new product for an under-served niche, they find out that their competitors will imitate them within a few months. Is investigating and developing new products going to be profitable for Amplitude?

coyin · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

d

Answer to Question 2

These new products are creating value as the under-served niche customers do value them. However, they are not able to capture this value for very long as competitors can copy them quickly. This is only likely to be profitable if the cost of developing a new product is trivially low.