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1. Should the government step in and set minimum price levels?

1. Should the government step in and set minimum price levels?

1. Should the government step in and set minimum price levels? Discuss the consequences of your answer.

2. You’ve heard of a monopoly, but have you ever heard of a monopsony? A monopsony involves one powerful buyer and many sellers. The buyer is so powerful that it can drive prices down. An example is Wal-Mart, the world’s largest retailer. Wal-Mart’s power allows it to get the lowest possible prices from its suppliers. Similarly, wine-making giant E. & J. Gallo has so much power buying grapes that growers have to concede to the wine maker’s demands for lower prices.

a. Is it fair that a buyer can exert so much power over a supplier? Are there any benefits to consumers? Why or Why not?

b. Explain the differences among styles, fashions, and fads and give an example of each.

3. Name and describe the five stages of the product life cycle. Identify a product class, product form, or brand that is in each stage.


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