Question 1

Penquin Ltd.agrees with Apple Corporation to use the "agency" model of setting prices and paying commissions on the sales of e-books for iPads.Under this model, publishers

Accepted Answer

Under the "agency" model, publishers set their own prices, rather than retailers setting the prices as in the "wholesale" model.

Question 2

Vid Games, Inc., is a U.S.company currently involved in significant innovation and cost and quality competition with its rivals.With respect to the direction and control of Vid and its competitors in the United States and other countries, different models of corporate governance exist, depending on

Accepted Answer

Different models of corporate governance exist based on the degree of capitalism in a particular nation. The way companies are structured and governed is influenced by the laws and regulations of the country in which they operate. The level of government involvement and influence, shareholder rights, and level of transparency can vary greatly between different economic systems.

Question 3

Cool Corporation makes energy-saving air conditioning units.Cool anticipates a change in the demand for its products as a consequence of climate change.One argument in favor of requiring Cool to disclose this information is that it could lead to

Accepted Answer

Requiring Cool to disclose information about the potential changes in demand for its products as a result of climate change could lead to sound investment decisions by investors. When investors have access to information that is relevant to the financial prospects of a company, they are better equipped to make informed decisions about whether to invest in that company. In this case, disclosure of the potential impact of climate change on Cool's demand could help investors understand the company's future prospects and make more informed investment decisions.

Question 4

Ray-On Corporation makes inexpensive, highly efficient, solar energy cells.Ray-On anticipates a change in the demand for its products as a consequence of climate change.According to the Securities and Exchange Commission, Ray-On should

Accepted Answer

The Securities and Exchange Commission requires companies to disclose any material information that could affect the value of their securities. Since Ray-On's anticipation of a change in demand due to climate change is likely to be considered material information, the company should disclose it to its investors and the public. Keeping the information confidential or revealing it only to insiders or current shareholders would not comply with SEC regulations.

Question 5

Deutsche Werke, GmbH., a German firm, is harmed by a price-fixing scheme engineered by Collider Industries, S.A., an international cartel.The European Union is most likely to

Accepted Answer

The European Union is likely to actively pursue Collider Industries, S.A. and impose civil penalties as price-fixing is considered a violation of antitrust laws in the EU. The EU Commission has the power to impose fines on companies found to be engaged in anti-competitive behavior, and it is likely to exercise this power in this case to protect the interests of Deutsche Werke, GmbH.

Question 6

The U.S.Department of Justice files a suit against Random House, Inc., and other major book publishers, charging that they conspired to fix the prices of e-books.One result of limiting e-book price competition is that consumers

Accepted Answer

The suit alleges that the conspiracy to fix prices resulted in higher prices for e-books, which means consumers had to pay more than they otherwise would have.

Question 7

DeLuxe, S.A., is a French company with offices and operations located throughout Europe.With respect to the direction and control of DeLuxe and other firms in continental Europe, the prevailing coordinated model of corporate governance gives priority to the interests of a corporation's

Accepted Answer

The coordinated model of corporate governance in continental Europe prioritizes the interests of stakeholders, including employees, managers, suppliers, customers, and the community, rather than focusing solely on shareholders.

Question 8

Etoile Metrics, S.A., a French software firm, is harmed by an exclusive-dealing scheme engineered by Flash Search, Inc., a U.S.software firm.Compared to U.S.laws, the European Union's laws

Accepted Answer

The European Union's laws define more conduct as anticompetitive compared to U.S. laws. This includes exclusive-dealing schemes, which are considered illegal under EU competition law.

Quiz 24: Online Developments: