The poultry industry in Floriana is made up of numerous firms selling more or less homogeneous products. The smaller? players, however, give low priority to quality and hygiene. Goodrick? Corporation, one of the oldest firms in this? industry, has recently introduced its brand of processed chilled chicken called? "Better Chicken."? "Better Chicken" is priced higher than the local unbranded varieties and is promoted for its tenderness and hygienic methods of production and refrigeration.? "Better Chicken" has become very popular and Goodrick is now making substantial profits.? Consequently, some of the other firms have begun to introduce different varieties of processed poultry items.

Which of the following is most strongly supported by the information given? above?

A. Goodrick will operate on the inelastic portion of the demand curve.
B. Goodrick charges a price equal to the cost of producing an additional unit of? "Better Chicken."
C. The government of Floriana imposes a price ceiling on poultry items.
D. Following product? differentiation, Goodrick will operate with excess capacity.
E. The local firms selling unbranded chicken will be driven out of the market.

Blue computers, a major pc manufacturer in the united states, currently has plants in kentucky and pennsylvania. the kentucky plant has a capacity of 1 million units a year and the pennsylvania plant has a capacity of 1.5 million units a year. the firm divides the united states into five markets: northeast, southeast, midwest, south, and west. each pc sells for $1,000. the firm anticipates a 50 perc~nt growth in demand (in each region) this year (after which demand will stabilize) and wants to build a plant with a capacity of 1.5 million units per year to accommodate the growth. potential sites being considered are in north carolina and california. currently the firm pays federal, state, and local taxes on the income from each plant. federal taxes are 20 percent of income, and all state and local taxes are 7 percent of income in each state. north carolina has offered to reduce taxes for the next 10 years from 7 percent to 2 percent. blue computers would like to take the tax break into consideration when planning its network. consider income over the next 10 years in your analysis. assume that all costs remain unchanged over the 10 years. use a discount factor of 0.1 for your analysis. annual fixed costs, production and shipping costs per unit, and current regional demand (before the 50 percent growth) are shown in table 5-13. (a) if blue computers sets an objective of minimizing total fixed and variable costs, where should they build the new plant? how should the network be structured? (b) if blue computers sets an objective of maximizing after-tax profits, where should they build the new plant? how should the network be structured? variable production and shipping cost ($/unit) annual fixed cost northeast southeast midwest south west (million$) kentucky 185 180 175 175 200 150 pennsylvania 170 190 180 200 220 200 n. carolina 180 180 185 185 215 150 california 220 220 195 195 175 150 demand ('000 units/month) 700 400 400 300 600