SELF TEST #19: Project the Direction of Future Prices and Margins
True or False: Even in a low-return, oversupplied industry, some new capacity will be added each year.
True or False: The low-cost competitor sets the industry price level.
True or False: Demand growth can end Hostility, but may do so only temporarily.
When should a company spend time and money to develop specific forecasts of future prices?
What combination of factors could lead to the following statement: Senior partners in Wall Street Law firms raised their hourly rates in 1987 from $300 to $350?
What is Price?
When is Price likely to go up in a market?
When is Price likely to go down in a market?
What is Capacity Creep?
Why are high returns a potential problem for an industry?
What is the practical effect of a Price?
The industry is consolidating with many mergers and acquisitions. Will this reduce industry capacity?
Why should we bother to forecast future prices?
What forces tend to put prices and margins under pressure?
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