Economics

Directions: Identify the Competitive Situation in each of the following scenarios. Consider the following hypothetical situations, identify the competitive situation represented, and then briefly explain what factors led you to this conclusion. 1. Sam's Gas and Snacks is the only station located at the crossroads of a major highway and Interstate 17 going north and south. The closest town is located on the major highway five miles east. Their main target is travelers. Competitive Situation: Explanation: 2. Tender Care is a licensed day care center located in a city of 300,000 people. Tender Care has three centers operating in this city. There are about 15 similar day care centers operating in this city also. Some businesses have their own on-site day care centers for their employees. In addition, there are many individuals who conduct day care activities out of their own homes. Due to the number of day care operations, they all charge approximately the same price. Competitive Situation: Explanation: 3. Mr. Jones has approximately 300 dairy cattle that he milks twice a day. Every morning at 9 a.m., the wholesaler stops on his route with his tanker truck and picks up Mr. Jones' milk. The milk is then taken to the processing plant, where it is combined with hundreds of other dairy farmers' milk from around the area. Most of the milk is processed and put into bottles or cartons and shipped to local stores. Some of the milk is used to produce other dairy products. Competitive Situation: Explanation: 4. Elvira College has an enrollment of 1,000 students and is located in a small Midwestern town named Johnsonville. Johnsonville has a total population of 2,500 people. The nearest town is 20 miles away. Most of the residents shop locally, but they travel about once a month to the larger city and pick up the large-ticket items. Johnsonville has one fairly good-size supply store named Jameson's Grocery. The only other place in town where you might buy supplies is at the gas station/convenience store located on the edge of town. What competitive situation is Jameson's Grocery experiencing? Competitive Situation: Explanation: 5. Iowa farmers can choose from five different manufacturers of farm implement equipment. Two of these manufacturers account for more than 80 percent of all the farm equipment sold in Iowa. These two manufacturers produce very similar equipment. Whenever one manufacturer has a sale, offers rebates, or offers special financing, the other manufacturer quickly follows with a similar program. Competitive Situation: Explanation: