Wk7 dq – managerial economics

Discussion Question – CLO 7

Please read Chapters 13 & 14 and answer the two following questions:

1. During the early days of the Internet, most dot-coms were driven by revenues rather than profits. A large number were even driven by “hits” to their site rather than revenues. This all changed in early 2000, however, when the prices of unprofitable dot-com stocks plummeted on Wall Street. Most analysts have attributed this to a return to rationality, with investors focusing once again on fundamentals like earnings growth. 

  – Does this mean that, during the 1990s, dot-coms that focused on “hits” rather than revenues or profits had bad business plans? Explain. (Chapter13- Problem 14)

2. During the dot-com era, mergers among some brokerage houses resulted in the acquiring firm   paying a premium on the order of $100 for each of the acquired firm’s customers. 

  – Is there a business rationale for such a strategy? 

  – Do you think these circumstances are met in the brokerage business? Explain. (Chapter 13- Problem 17)

Note: 

1. Define the words in your own words. Do not directly quote from the textbook.

2. Need to write at least 2 paragraphs

3. Need to include the information from the textbook as the reference.

4. Need to include at least 2 peer-reviewed articles as the reference.

5. Need to provide examples whenever applicable.

6. Please find the related PowerPoint and textbook in the attachment. 

7.  Please answer each of the following questions in detail and provide in-text citations in support of your argument. Include examples whenever applicable. 

8. Please find the Course Learning Outcome list of this course in the attachment. 

Textbook Information:

Baye, M. R., & Prince, J. T. (2017). Managerial economics and business strategy (9th ed.). McGraw-Hill Education

ISBN 9781259290619

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