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Sterling, Inc. is a manufacturer of state-of-the-art computers. For the past ten years, Sterling has acquired all of its microchips from NoBugs Corporation, the only producer of chips meeting Sterling's high specifications. The relationship has been mutually profitable. Sterling could not have built its reputation as an industry leader without NoBugs's reliable and consistently high-quality products; Sterling's business has enabled NoBugs to grow rapidly while providing its investors with an attractive rate of return.
Some months ago, several of Sterling's computers exploded shortly after installation. Upon investigation, Sterling discovered that tiny imperfections in NoBugs's microchips had aggravated a dormant design defect in the computers, causing the explosions. Analysis of the chips indicated that they were indeed below specifications and that the imperfections were caused by a slight miscalibration of NoBugs's encoding equipment. NoBugs recalibrated the equipment and promptly resumed production of perfect chips.
Sterling's losses from the explosions - lost profits, out-of-pocket costs associated with compensating customers for the explosions, and injury to business reputation - are estimated to exceed $20 million. Sterling and NoBugs disagree on the amount of the loss for which NoBugs should be responsible. Sterling has a strong legal case for breach of contract against NoBugs. Sterling's CEO is considering a lawsuit. She asks you to prepare a report discussing litigation strategy and the advantages and disadvantages of litigation; and discussing pretrial planning should the company opt for litigation.
Write a discussion of the pre-trial planning that should be done if litigation is pursued.
Suppose a public referendum is being held on whether or not to levy a tax on cigarettes. Currently, the supply of cigarettes is given by Qs = -120 + 28P. You estimate the demand for cigarettes to be Qd = 200 - 4P. What is the price elasticity of dema..
q. assume that the feds inflation target is 2 percent potential output growth is 3.5 percent as well as velocity is a
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What he didn't foresee was that number of T-shirt stores in South Padre would jump from roughly 10 to 40 within two years. Now he laments.
Compute the average revenue and the marginal revenue of a fully competitive firm and illustrate in diagrams both the curves of the average and the marginal revenue.
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Conditions that exist when they shut down their operations and the conditions that exist when they resume their operations.
Consider a new per-worker employment tax on workers (where previously there was no tax). Outline the consequences of this tax on the local labor market. Use appropriate, clear, and well-labeled diagrams. In your answer show (1) the burden of the tax ..
Identify the key individuals in this case. Each team member must select a different individual from the case to explain his or her ethical or unethical actions and how those actions influenced the events that occurred.
The NFL wants to give the "common fan" the opportunity to attend the Super Bowl, Illustrate what is the equilibrium price also quantity.
From 1983 to 1987, a period of rapid economic growth in the U.S., total savings by contributors to IRAs increased by approximately the amount of their IRA contributions. Does this show that virtually all of their IRA savings were new savings money th..
Review Netflix most recent balance sheet, income statement, statement of stockholders' equity and statement of cash flows. Pay particular attention to sales and net income for the last two years. Comment on 2-3 items that you find remarkable on any o..
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