I. PRICE DISCRIMINATION
Suppose you are given the following graph for McGraw Hill which sells in more than one market.
Based on this graph, answer the following questions:
a) If McGraw Hill acts as a single price monopoly and uses a common price, what will be the total revenues as compared with what the firm will earn if it engages in price discrimination?
b) What can be an economic rationale for charging a higher price in Country 2 vs Country 1?
c) What are the conditions needed for McGraw Hill to continue to engage in price discrimination
d) What will be the difference in profit levels of a single price monopoly vs a discriminating monopolist if the average costs is $3 per unit in common all the three scenarios.
II. BUSINESS PRACTICES AND STRATEGIES:
The Indian economy has evolved into a dynamic and vibrant force with sustained growth rates of 6-8% for more than a decade. A primary reason for this growth is moving to a market- based economy. A few years ago, I accompanied a group of Professors from the United States visiting various corporate headquarters in Mumbai and Bangalore, India. The corporations which we visited included Seimens (a German Multinational), Glaxo Smith Kline (a subsidiary of a British pharmaceutical company)., IT companies of Indian origin, a Management Consulting firm besides the U.S. Consulate in Mumbai, India.
On my return, I presented a report in the form of a case study to my sponsor at Tarleton State University. This report highlights the successful business practices and strategies followed by Indian businesses. Based on this report (See Learning Module, Chapter 13 following the section "McDonalds in India" for a link to this report) as well as the discussion from our textbook in Chapter 13 on Multinationals "Doing Business in India" (Pages 513-517), answer the following questions:
a) Choose any one domestic or multinational corporation covered in the report and describe the business practices and problem solving approaches followed in India.
b) How should U.S. firms in general adapt to globalization? Give specific examples.
c) Using a SWOT Analysis approach, describe how American firms can take advantage of conductingbusiness in an emerging market such as the Indian economy
III. The Role of the Government
In this political election cycle, the role of the government in the economy is being heavily debated with some arguing that less is needed whereas those that the government should involve more. The events of Flint, Michigan with lead found in drinking water source highlights the dilemma of less vs more government. Using the chapter in the textbook, compare and contrast the role of the government in the marketplace. Use arguments which support a greater role of the government and contrast with why this role should be minimized. Is there a healthy balance?? Explain.