Le Jouet is a profit-maximizing firm that produces toy trains. In France, its home country, it enjoys unchallenged market power
due to trade barriers that restrict competition. However, Le Jouet also exports toy trains to Russia, where the market is highly competitive. Given this scenario, which of the following statements is correct? The demand that Le Jouet faces for toy trains in France is less elastic than in Russia. The demand that Le Jouet faces for toy trains in Russia is less elastic than in France. Le Jouet sells toy trains at a lower price in Russia to dispose of its excess inventories.
The demand that Le Jouet faces for toy trains in France is less elastic than in Russia.
Explanation:
This is the statement that best describes the panorama that Le Jouet faces in France. When comparing the markets of France and Russia, we learn that the demand for toy trains in France is less elastic than the demand in Russia. Price elasticity refers to a measure of responsiveness of consumers. This measures how responsive consumers are to a price change.
The answer is A) Puts emphasis on the external environment, which plays a role in determining a company´s ability to achieve above-average returns.
Explanation:
The I/O Model of Above-Average Returns basically assumes that the industry in which a company decides to compete in has a much larger influence on performance (earnings and profit) than the choices the managers of this company make.
The basic assumptions of this organization model are:
The external environment imposes pressures and constraints that determine the strategies of the company and will result in above average returns.
It assumes competing companies control similar strategically relevant resources and pursue similar strategies.
Resources are highly mobile across companies, so that any differences that might develop between companies will be short-lived.
Decision-makers within the company are assumed to be rational and committed to acting in the company´s profit-maximizing behaviors.
The effective problem statement explains the specific context of the problem and the best way to resolve the problem.
The effective problem statement is a section in a business report that spot a problem & addresses the problem and explains clearly why it is important to address such problem.
Therefore, the Option B and D is correct because the effective problem statement explains the specific context of the problem and the best way to resolve the problem.