Answer: Product differentiation strategy
Explanation: In the given case, the industry in which Thomas works depicts features of oligopoly with few firms operating at high level. Thus, increase in price by Thomas would shift the demand for consumers to other firms.
Hence Thomas should opt for product differentiation strategy and should increase those features which classify its products different from the others. In such industries, quality is the core essence and costumers are wiling to pay slight higher prices if the quality of the product offered is higher than others.
Hence Thomas should narrow the completion and should focus on inventing some unique features in his products.
Answer:
Number of coupon payments = 13.5*2= 27
Coupon = 6%*1000/2= 30
Let rate be r
Present value of all future payments = $87
875 = 30*(1-1/(1+r)^27)/r + 1000/(1+r)^27
R= 3.74%
Nominal rate = 3.74%*2 = 7.49%
Answer:
lower; stronger
Explanation:
Purchasing power parity (PPP) is a theory where the exchange rates of the states that lies between the currencies should be in equilibrium
Also their purchasing power should be similar in each and every of the two countries
So as per the purchasing power parity when the inflation rate of domestic one should be less as compared to the foreign country so the domestic currency should be stronger as compared to the foreign country