BM2207 Economics of Digital Business (PRD2 A 2024/25)
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During the years when the Atari 2600 VCS console dominated the home videogame market, competing consoles with superior technical capabilities such as the Intellivision and the ColecoVision were unable to gain significant market share. This is because
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When firms compete to supply homogeneous products and have similar cost structures, pure price competition drives firm profits down to zero. A firm can mitigate this outcome by
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Consider a duopoly market where two firms supply products that were previously perfect substitutes for each other but succeed in differentiating them vertically. Which of the following statements best describes the evolution of their profits assuming all other factors (including production costs) remain equal across both firms?
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Which of the following examples does not identify an avenue for a firm to sustainably outperform competitors?
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Which of the following is an avenue for the firm to exploit switching costs in order to increase profitability from existing customers?
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A leading firm operating in a contested market that exhibits network effects on the demand side is competing against smaller rivals to attain dominance. Which of the following factors in this market would make it more likely to succeed?
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Consider the problem of an entrant in an industry where economies of learning play an important role in determining the long-term trajectory of production costs (e.g., the production of flash memory for solid-state storage). Which of the following strategies could be effective for the entrant to minimize production costs in the long-term?
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Spotify’s “Discover Weekly” is a feature that generates personalized music recommendations for subscribers based on their past listening activity. Spotify has invested in the development of this feature and it is considered the best such offering in the industry. For Spotify subscribers who use and enjoy Discover Weekly, the feature…
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Two separate groups working inside your startup incubator have developed service offerings for consumers that are close substitutes for each other. As a tech investor with the goal of maximizing profitability across your incubator portfolio, you advise them to differentiate their services by
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Facebook’s strategy when introducing its social media service and growing its userbase exploited network effects by…
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