Question

1. Oklahoma State University requires vendors to pay to the university scholarship fund a percentage of their overall sales. What will likely be the long-run effect of this on prices of vendor goods, financial aid, and scholarship revenues? Why?

2. PlayStation owners can subscribe to a streaming game service called PlayStation Now that includes more than 200 older video games that can be played on an “all you can play” basis for $20 per month. How does this affect the optimal price for the PlayStation 4?

3. Netflix offers “all-you-can-rent” one disk out at a time mail order rental of DVDs while Redbox rents individual disks on a daily basis at individual kiosks but provides frequent discount codes to reduce the price of disks to end users (occasionally even offering them for “free” to frequent customers). Which strategy is likely to be more profitable? Why?

4. How can filing bankruptcy help a firm in negotiations with creditors or with unions? Why might a creditor want to force a firm into bankruptcy?

Answer 1

ANSWER-1)

Price of vendors good: In the long run there is likely to be a rise in demand and vendors can avail the benefits of economies of scale with more production. Socially responsible companies enhances in attracting and retaining customers. Thus with economies of scale it is likely to decrease the price of vendor goods in the long run

Financial aid: As there will be a rise in the funds thus the financial aid would reach more number of people because of sustainability strategies in the region

Scholarship revenue: In the long run it is likely to increase revenue from scholarship because with an increase in profits due to higher sales and more revenue

As per policy we have to answer first question