Question

In this chapter's Headline, we learned that Tom Jackson benefits by announcing well in advance his new marketing plan to target businesses. Suppose you are an executive at Morton's, and by lucky happenstance you learn of Tom's plans before he implements them. What plan of action should you take? Explain.

Short answer

As a decision-maker of Marton's, one will decide to enter the business knowing in advance that Tom decides to stay serving the household sector and receiving a profit of 50$. The firm Marton's will obtain a profit of 100$ attending the business.

Step-by-step solution

To find the OH- concentration in M HCLO

The headline of the chapter shows that Tom Jackson, observing that Morton's steakhouse, has decided to apply a marketing strategy to target businesses instead of households. This strategy will also seek to change the firm's target from household to business.

The following table and diagram show Tom's possible combinations if he decides to stay with the household or switch to business and Morton's decision to enter the market or not.

To find the OH- concentration in 0.0810 M HCN

Marton will decide to enter the business market. However, Tom is the first to determine what action to take and may choose to enter the business market, generating a profit of 90$ and preventing Martons from making a profit. If Tom decides to stay in the household market and we, as Marton's managers, decide not to be in the business, we will continue to get 0$ in income while Tom's income will increase to 105$.

The option to enter the market and share the market share of the business sector with Tom will generate a loss of - $50 for us and - $200 for Tom.

Therefore, the decision-makers of Marton’s will decide to enter the business knowing in advance that Tom decides to stay serving the household sector and receive a profit of 50$. At the same time, the decision-makers will obtain a profit of 100$ attending the industry.