Author Question: Supplier Power Nora's Nicest Knick Knacks has produces a variety of products sold as souvenirs. She ... (Read 123 times)

fahad · **on:** Jul 1, 2018

Supplier Power Nora's Nicest Knick Knacks has produces a variety of products sold as souvenirs. She started out printing local sayings on tee-shirts, e.g., FDNY, and purchased plain tee-shirts from a single supplier. Since then, she has added coffee mugs, key chains, souvenirs spoons and many other items. For each of these, she has lined up one or more suppliers. How does the change in the sourcing of her inputs affect how much of the value she creates that she gets to capture?

Question 2

Potential buyers of older homes form their bids from imperfect estimates of a house's value As a consequence,
a. Lower quality houses are more likely to be up for sale
b. Higher quality houses are more likely to be up for sale
c. Both the higher and lower value houses would be offered for sale
d. No houses would be offered for sale

trampas · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

Nora's purchases used to be concentrated with a single supplier. This means she had to take whatever deal they were offering or go out of business. But over time, she has added more suppliers and is less dependent on any one. This means she can still have sales and production of some items even while she is negotiating with suppliers for another. This means she will tend to capture more of the value her firm creates.

Answer to Question 2

a