critique of "With Oil Prices Increasing, is it Time to Switch to Natural Gas?"

The original article is very well written and informative. The energy crisis and the need for the world as a whole to work together to discover new forms of energy is very high. There have been many discoveries, but the implementation of these new techniques has been limited due to many reasons. The author mentions that there has been a shift in the way that homes are heated in the northeast, and that this shift has been to switch from heating oil to natural gas. The author mentions the high cost of converting your home’s heating machinery to natural gas. I agree with all of the author’s commentary in this area but I would like to mention a few additional points. The reason for the shift between oil and natural gas could also be due to the fact that older homes are being demolished and newly constructed homes are being fitted with natural gas systems. This would cause the statistics over time to reflect some type of shift that may have been caused by nothing other than the cycle of home construction. Also, in homes that were originally fitted with oil systems, homeowners may opt for more efficient and modern natural gas systems when their oil fueled heating systems malfunction. Also, it is relatively easy to have a natural gas pipeline installed to your house, giving you a constant supply. In most cases, oil fuel must be trucked in to the home site, which can lead to many various inconveniences. To summarize, there are many reasons and situations why a shift may occur other than fuel supply pricing.

I agree with the author’s commentary on the newly discovered supply of natural gas, this makes sense with the fundamental law of economics, supply and demand. The supply increase leads to lower prices for consumers, but I would say that this is only a short-term effect. As the demand shift more and more to natural gas because of low prices, the supply will be strained and then the price will be increased. The current time is the best time to consume natural gas, but in the near future it will no longer be the best choice. Although there are large supplies of natural gas, it is still a nonrenewable resource, which will eventually run out.

The author made a very good point in the discussion of the companies controlling the oil and natural gas markets. The fact that the OPEC group engages in price-fixing is a large disadvantage to the oil consumer. The fact that natural gas is something that the US can primarily source in-country is of great advantage since price-fixing is legally prohibited in the United States.

Critique on Melissa Zeina- The Supply and Demand of Gas

Steven Christopher
Critique on Melissa Zeina- The Supply and Demand of Gas
Melissa’s article post of supply and demand of Gas is current and very interesting. She starts off by stating the gas prices have been at an all time high because of a simple problem of supply and demand because of recent disasters is Japan and in the Middle East. Melissa gives evidence by stating that gas prices have raised eighty cents sense last year. This is because the oil companies in the Middle East are having a very hard time providing the supply for the demand. “The main issue focused on here is the inequality of supply and demand. Supply is not changing, but the demand is on the rise.” (Melissa). Because the demand is rising, so much the supply, and the equilibrium price is changing. Statistically, if demand increases than so must the price of gasoline.
The problem with this is that the demand of gasoline will never diminish as long as it is the main fuel provider for the world. Since gas is a natural resource, there will always be a high demand for it until it finally runs out. But, this is not the only thing that is changing the demand of the gasoline, the majority of it is happening because of the international problems that were caused in Japan and the Middle East. “The Japanese economy is going to need its electric power from oil-based sources as a backup to their nuclear problems”. (Melissa). This means that Japan is going to be purchasing a vast majority of the oil supplies. Although there is a serious shortage of gasoline, the demand curve and price will continue to shift. Consumers will continue to purchase the gasoline no matter what the equilibrium price is set at.
Another relevant point that Melissa makes is that the demand isn’t just being caused from the disasters, but from increase of industrialization and production. As stated, “The two of the main countries that are increasing the demand of oil are India and China.” (Melissa). If predicts to increase their oil consumption by 6.5 percent this year alone than the demand and price of oil will increase. I agree that one of the main reasons that oil prices are going up is because of the large amounts of oil that the strongest world powers are using.
Finally, I agree with the statements that Melissa makes about consumption increasing as price does. Some countries do not have an alternative resource of power. Even though the definition of price elasticity states that if a price commodity rises, then demand will fall, it is not like that. The supply is what is determining the price of the gasoline, and the supply is remaining the same because they can only drill so much out of the ground. Demand is going to continue to increase. I disagree with Melissa’s statement that the large increase of price in the summer will lessen the demand for gasoline, at least in the United States. We have very poor public transportation such as electric powered trains. Americans rely on their cars to get them everywhere, and you need gas to do that. Gasoline will always have a high demand, high price, and small supply.

Critique On Apple Becoming an Monopoly?

The blog I chose to critique is Laden’s blog on whether Apple has become a monopoly. I think it is interesting the way that Laden questioned the idea of Apple monopolizing the music and computer industry I had never really thought of Apple that way. But, after taking a closer look and reading through Laden’s blog, I agree with this idea because a monopoly is defined as singular seller with complete control over the industry. Even though, I do not think that Apple monopolizes the computer industry because there are still competitors such as Dell, HP and Microsoft that still make and sell computers along with other competitors. The idea the market for computers is an oligopoly is a fair claim as well because the definition of an oligopoly is a market with a few competitors. There are only a few firms in this industry such as Apple, Hp, and Dell. So, Apple has its fair share of competitors in that area of the market. But, Apple does have a large amount of market power in the industry. This is a type of Market that is very difficult to enter as well due to all the money it requires upfront to make computers. This type of market requires a lot of technology knowledge and highly educated employees, which is difficult to fund. The computer market is hard to enter because there are strong competitors with good reputations making it difficult to enter such a competitive market. Although, Laden’s claim on Apple monopolizing the music industry seems to be valid. According the article written by James R. Stoup Apple has no real competitors in the music industry. Other competitors cannot seem to keep up with Apple’s great products. I agree with Laden’s idea that Apple has a monopoly over the downloading music industry because they have no real competitors giving them the ability to dominate the market. Another reason this market should be considered a monopoly because it is very difficult for other competitors to enter the market. This is a market that requires a lot of money up front to be able to make it in this particular industry. Since Apple is continuing to flourish it is unlikely that another firm would attempt to compete with such a strong company such as Apple. As Laden said, this is a legal monopoly because Apple is not forcing competitors out by putting them down or partaking in negative advertising. Apple is just working hard to keep consumers wanting more of their products.

http://www.applematters.com/article/has_apple_finally_become_a_monopoly_like_microsoft/

Critique on "The Rise of Netflix, the Demise of Blockbuster"

In the article of "The Rise of Netflix, the Demise of Blockbuster" the writer stated the change in new business techniques for the movie rental industry that companies such as Netflix, Hulu, and RedBox have picked up on. These days, you no longer have to drive all the way to a movie rental store such as Blockbuster to pick up the desired movie you want to watch. The movie you want to watch can come right to your house on either your TV or computer. Nothing beats watching your favorite movies with a few clicks of a button while sitting on your couch. Blockbuster stayed with their same business techniques that has almost put them completely out of business.

Everyone remembers Blockbuster had stores on the side of the roads in almost every town you happened to be in. As the years went on Netflix launched their company in 2003 which runs from the internet, RedBox's started appearing infront of local grocery stores all over the nation, and Hulu is another internet ran company. Blockbuster did not give in and follow these companies techniques and started losing much of their money.

The writer stated that companies like Netflix started because of Blockbuster's outrageous late fee's. A man named Reede Hastings started the company and went with a no late fee policy. Many people did not like Blockbuster's late fees which generated $300 million in profits annually. Later on, Blockbuster took away late fees and ended up losing even more money. In 2010 they brought back the late fees and it still did not help. No matter what Blockbuster did, they could not keep up with the newer companies.

I agree with this writers post that if a company does keep improving their business techniques and up to date then they will not succeed in later years. I think a company constantly needs to be thinking of bigger and better ways to improve. The writer quoted the famous economist Ludwig Von Mises and he said, "if a business is unsuccessful, it is often because they failed the consumer." I agree with that quote because I think Blockbuster failed the consumer by not keeping things up to date. As technology grows, things become easier and easier for us. Blockbuster did not keep up with times and stuck with their time consuming ways of movie rentals. Netflix, Hulu, and RedBox stepped in and figured out a way to make movie rentals easy for the consumer and less time consuming. In order for a company to succeed, they need to constantly be thinking of ways how they can improve the product they are selling or how they can keep the consumers happy or even make them even happier.

Critique NFL Labor Dispute

Stephanie discussed the possibility of the NFL season being cancelled due to the disagreement between the players and owners. The NFL has enforced many things before but taking away NFL player’s salaries does not benefit the players nor the many vendors that benefit from the NFL. The NFL is a major association that should not be messed with due to its large acceptance throughout the American population. This lock out, enforced by the owners, locked out the players, “creating the NFL's first work stoppage since 1987 and putting the 2011 season in jeopardy”. I see where the NFL has no problem placing a lock out on the player because of the revenue the company has already received, but the association does not understand the economical errors that other companies will be presented with. Surely the NFL could lock out player till 2012, but the advertisement of many companies would be in slander. It will cut into billions of dollars of other company’s profits.

Stephanie does a good job in relaying what the problems and conflicts are involved in the NFL case. She has a good summary but could have incorporated more of the economics problems into her blog. She fails to identify that the NFL is one of the major Monopolies in American. A monopoly is the exclusive possession or control of the supply or trade in a commodity or service. The NFL association being the monopoly that it is alters the demand for many other companies and products. As I stated before the lock out would cut into billions of dollars of revenue that many companies rely on. Companies like alcoholic brands depend on the NFL for sales, customers, and advertisement. Beer companies such as Corona use commercial time during Sunday Night Football to relay their brand to consumers. Beer and football go hand and hand. Without football players on the television screen, there will be a decrease in demand for beer. Some American’s at home only purchase beer in the event of an NFL game.

Thus, another aspect of the market that could suffer from the NFL lock out is the gambling economic aspect of the NFL. The league posts the odds of that week's game in the newspaper and on TV. They don't just predict who will win, but what Las Vegas and the gambling world will say they will win by in the final score. The league also tells gamblers what other gamblers in Las Vegas and Atlantic City think the outcome would be. Without players out on the field the football gamblers will be at a loss.

Critique to Stephanies NFL Lockout post

The article I chose to critique is Stephanie's article on the NFL lockout. There was a lot of truth and validity to this looming lockout, and I agree that the economy will take a tremendous hit in the income it brings through the National Football League. The NFL lockout will have a significant hit on the NFL cities revenues that the team brings in, the marketing of NFL memorabilia and ticket revenues, the loss of sponsors that rely on the NFL, and overall will lead to a noticeable loss of generated revenue for the economy. With this lockout potentially occurring, the economy stands to endure a powerful hit. I completely agree with Stephenie and the author of the the original article in that the most noticeable effect the lockout will have is on the decrease of income that the city will endure. People will not travel in for the weekend, stay at hotels,buy food, go to local establishments, and not give ticket revenue to the stadium and teams. The stadium will lose the eight home games of ticket sales. Although the stadium may be used for other events, they will lose the guaranteed thousands of people coming to that city for the NFL game. This will cause a negative economic hit on the revenues of theses cities, especially the smaller cities that have teams, such as Green Bay or Baltimore, as opposed to New York or Dallas. Also, the job economy for the people who worked for the stadium or local restaurants will decrease, causing many to lose their jobs. Another significant hit for the economy will be the loss of marketing of NFL products and memorabilia. Without players having jobs and playing football, the ability for the NFL to make their memorabilia will be eliminated, in which revenues will fall. There will be no more NFL players on commercials, there will be hardly the same amount of jersey sales, and players could turn insignificant and unmarketable due to ages increasing. This lockout also will lead to a loss of sponsors that the NFL has. The beer and television sponsors rely heavily on the NFL as one of their major sponsorships. The only positive that I can see, other than a potential that College Football and the NCAA can benefit, is the UFL (United Football League). This league is not popular compared to the NFL, but when the NFL players who still want to play football need a team, the UFL could blossom and turn into a significant revenue turnout for the economy. In general, I thought this was a good topic to look at closely, not just because I am an NFL fan, but the fact that it could have significant negative implications on the economy.

Critique on Megans Beer article

My critique one this article about how the major beer companies are being an oligopoly and raising their prices together is wrong. Personally I see nothing wrong with what they are doing. In our economic and culture there is going to be a endless demand for beer (alcohol). The C.E.O.’s of these companies know what is going on in today’s society and they know they people will pay for their beer. This Article states that Obama’s administration has been trying to break up the monopolies and others like it. This is impossible. The people who were smart and bright enough to start this venture should have all the benefits. There is nothing the government can really do. Alcohol is an depressant and a lot of the United States drinks, some depend on it. The only way they can really do something about these companies is to ban alchol again. We all know that wouldn’t work. Why would Obama want to break this up? These companies supply thousands of jobs in the united states and its companies that will not go under. Yes, their prices are going up, only because they know they will make the money. what company does not want to make more money. These companies will always meet the supply of the demand that is asked for. I also dont think they are doing this on purpose persay. Their costs for everything they do has gone up and times are still affecting them so they are in the product market where they can push their prices and make up for the deficits.

Critique of Has Apple Finally Become a Monopoly Like Microsoft?

The growing concern among faithful Apple users is that the company is becoming a monopoly. Many people think that the concept of a monopoly is a good thing; the board game “Monopoly” declares the player with the most money and control of the board as the winner. The definition of a monopoly is the situation that occurs when a single company has complete control of a market for a certain type of good or service. This company with absolute market power has no competition which creates a barrier for other firms who want to enter the market. Monopolies, by definition, produce a lower quantity of goods and charge higher prices for their goods than those firms who are in perfectly competitive markets.

This article first discusses the fact that Microsoft is a monopoly in the operating systems market. Even though being a monopoly is not considered to be illegal, using the status of being a monopoly to force smaller companies out of business and out of the market is illegal. In order to keep a company as a monopoly, the operations of the firm must be approved by the government or monitored to make sure a fair amount of competition remains in the market and that the firm is not breaking any laws. The question everyone wants answered is if Apple is considered to be a monopoly. The fact that Apple controls over 80% of the digital music player and digital content delivery market suggests that they are in fact a monopoly. Apple dominates these markets because they produce the highest quality experience for the lowest total cost (total cost = fixed cost + variable cost). The author, however, believes that “true competition is the only way to ensure superior products in the years to come” (Stoup, 1).

So according to the author of this article, it would be in Apple’s favor to have other competitors emerge in the market. When there are no other competitors in their line of business, it’s hard to constantly drive to improve their products when there isn’t any outside competition to motivate them. It would be in Apple’s best interest to lose some market share and have less power and control in the market. In class, we learned how to calculate the level of competition in two ways: the concentration ratio and the HHI. To calculate the 4-firm concentration ratio of the digital music player and digital content delivery market, we would take the top 4 successful firms in a specific market and add together their market shares. To find the HHI, we would determine how many firms are in the market, square each firms market share and then add those numbers together. Fewer firms in a market mean that there is less competition so each firm has more power in the market. So I agree with the author of the article when he says that “best deal for consumers is to hope that Apple loses market-share… the time could come soon enough when consumers might wish for a few more options in this ever more profitable market” (Stoup, 1). If Apple thinks it is in their best interest to lose some market share so that other firms would be able to enter the market and gain market power, then Apple would be able to lose their label of being considered a monopoly.

Critique "Gas and Supply and Demand"

I believe that Melissa's chosen article is incredibly relevant in interesting. While it's such a simple and a constant issue, she makes good points through out it when describing the issues of supply and demand within the industry. Gas is a necessary part of our every day life and affects absolutely everyone, including those in the class. Due to this, her stipulations about the issues regarding supply and demand when discussing gas are accurate. Due to the necessary and constantly increasing amount of demand that there is for gas the lesser supply, one can interpret this by saying that everyone will still continue to buy gas no matter what the price. There is no way for them to continue living their every day lives without this. Every object in the classroom is there because it was flown, shipped or driven by something that runs on gas. Since gas is also a natural resource there will a constant supply for the most part. Despite this, the demand has been increasing due to international problems. Some of these international problems are natural disasters, such as the earthquakes in Japan. This intertwined issue can be seen through a supply and demand curve. No matter what the price of gas is, the consumers will continue to pay despite this because of the constant high demand.

Melissa also states that as price increases, the consumption seems to also increase. She made a good observation when she noticed that this doesn’t follow the rules of price elasticity. Since price elasticity states that if the price of a commodity rises the demand will then fall. She claims that this loophole in the rule can be blamed on the rising consumption levels of Asian countries based on the fact that America’s demand hasn’t risen as such sharp levels. I believe that she made a good point when she blames supply as the determining price factor because there is no clear or current substitute for gas. Due to this, it makes gas inelastic since it becomes less than one. All of these are valid and necessary points to the argument that she is making.  When she discusses how if the price increase would create a decrease in demand for oil in Europe, the U.S. and China would help the price to go back down and the supply and demand to reach equilibrium, I wish that she had discussed some more of the consequences. Especially since there is a possibility that the price will continue to remain at such a high rate. I would also have liked to hear how she would interpret that within price equilibriums. 

Critique "The NFL Lockout"

The NFL Lockout is a very interesting situation from both the sports and economic perspectives. I believe the article presented many good facts and had a very good understanding of the economic effects of the NFL lockout, but left out other economical factors that could contribute to the situation. As stated in the blog, the NFL is one of just few legal monopolies in the United States. A monopoly is defined as a market structure in which a commodity is supplied by a single firm. The NFL’s monopoly does not just affect the football players, coaches and owners of the teams it can also have an effect on many other industries. For instance, the NFL Lockout will have a drastic effect on television networks, companies such as Reebok, NIKE and the other independent suppliers that carry NFL inventory in their stock.

This can cut billions of dollars of revenue across many different industries, for example companies that have made large profits off of sporting events such as the National Football League through advertising, selling products at the games or to fans of the game. Many television commercials directly target the “NFL Fan” companies will have to find different ways to advertise and promote their products one obvious example are beer suppliers such as Bud Light and Coors Light that have very targeted advertising. The economical impact of an NFL Lockout could be devastating to companies that rely on the NFL season to promote their products.

Another issue that would become apparent if the 2011-12 NFL season was not played would concern the billions of dollars of NFL “stock and inventory” that many retailers possess. Without a season there is very little reason for consumers to want to continue to purchase NFL items. This could have a direct effect on the price of NFL items, for instance a team’s jersey might sell for $70 now, but without a season the price could fall causing profits to be cut. This could also affect similar sports such as College Football, fans of the game of football might turn their support to college athletics because of the lack of the NFL. This could cause Cross elasticity of demand to change from NFL apparel to College football apparel. Cross elasticity of demand is defined as a measure of the influence of a change in one good’s price on the demand for another good. The NCAA could benefit from increase of sales due to the absence of the NFL, therefore end up increasing College Football apparel selling prices causing NFL apparel to drop in price and profit.

Critique on Gas and supply and demand

I am critiquing the article that Melissa did on “The Supply & Demand of Gas”. I think that she chose a very interesting and relevant article. Everyone in our class, assuming they have a car or at least their license, is affected by the price of gas. This article makes one realize how would wide events and disasters control things in our every day life’s including the price we pay for gas and oil. Melissa makes valid points throughout her blog. I think her statements about the supply and demand issues with gas are dead on. It has become apparent that U.S. citizens are most likely going to purchase gas at any price, due to the simple fact: that they need it. Since the demand is rising, it is changing the supply and demand chart and where the equilibrium meets. It is true, due to the fact gas is a natural resource, the supply is not going to change therefore it will remain the same. The same facts go for oil. Due to natural disasters, such as those in Japan that Melissa had stated, the need of oil is increasing, however it is not that easy to come up with as much as needed.

I found it very interesting how she related the increase of price to the increase of consumption of gas as irregular. It is true that is does not follow the rules concerning price elasticity. She mentioned how usually when price goes up demand decreases; I found it very useful for her making this comment. I however cannot agree with her blaming it on Asia. I feel that all of the countries affect this problem since everyone has strong needs of this substance. I did not understand her comment on the fact of rising prices in gas was in hopes to decrease the demands of oil. I feel that she may have meant to state the opposite.

The use of the supply and demand curve with gas was very relevant with our class. I believe that Melissa made it clear that no matter the price of gas, there will always be consumers and it will always have high demand. However I believe she could have made her points on oil a littler more clear and included more on what the political risk may be for the United States and other countries. I think the article left on a very influential note that gas prices are going to lower throughout the second half of the year and maybe Melissa should have included that. I feel that its important to know that, I would like to know that gas is going to decrease in price soon.

Critique of "Has Apple Finally become a Monopoly"

For my critique I chose to examine the post about Apple potentially becoming a monopoly. I found this article to be particularly interesting because the computer industry started as such a wide competitive market and the idea of another monopoly in computer technology to be concerning.

I agree with many of the points the author of the post brought up about Apple's current status. It is true that Apple's Macs are wildly popular, most notably amongst college students and that they do in fact face very stiff competition from opposing companies like HP, Dell and Gateway. I would have liked to have seen the blog post go into a little further detail into how well the market actually is shared and how big of a player Apple is. I also believe that the blog post needed to provide a little more background info into exactly how much of the digital music market is controlled by Apple. I'm aware that Apple's iTunes is synonymous with digital downloads and is the most popular source for people to download music, however I would like to know exactly how much competition other digital download firms like Rhapsody provide for Apple. I also believe it would be nearly impossible for Apple to ever reach truly monopolistic status on the digital download market, because even now illegal downloading of music is easy to access and very popular in today's age. An Apple monopoly would allow them to raise the prices of their music unfairly, but at the cost of losing many more people to the increasingly popular world of torrents and other free download methods.

Critique on "NFL Lock-Out"

I agree with many of the issues stated in the "NFL Lock-out" blog, but I believe there may be other issues to consider. As the blog stated, the owners would not have to pay the salaries or benefits of their players; however, I believe everyone involved (players, owners, fans, businesses,etc) will be negatively affected by a lock-out. The NFL is a billion dollar industry bringing in revenue to many different corporations and individuals. If a lock-out occurs and there is no NFL season, this industry will take a major hit. Fans will not be buying tickets to games so stadiums will be financially affected. Stadiums must pay taxes to the areas where they are located, so less revenue will mean less tax money coming into a locality. Stadiums also employ many workers in different capacities, who will now face the prospect of unemployment. The blog states that stadiums could be used for other purposes, but that is not a guaranteed option. It may be impossible to book events that would generate as much money as a NFL season full of games. NFL fans buy millions of dollars of merchandise every year. This marketing industry would also be affected, although probably not as drastically as other areas. Fans who would normally purchase souvenirs at a game will no longer have the opportunity to do so. The entertainment industry would also take a major hit. The NFL season is one of the most watched sporting events on television. Advertisers rely on reaching potential customers during televised games, especially during the Super Bowl. Television networks who have contracts to televise NFL games will have to find replacement programming which will affect their ratings and their marketshare of viewers. Players will be harmed by a lock-out as well. The sport's megastars will probably come through a lock-out with minimal financial damage thanks to large endorsement deals. However, the regular, everyday player will have to supplement his income in some other way. There may also be evidence of the substitution effect which could be beneficial to other sport's industries. The NCAA may be the biggest winner, as true football fans will watch more college football. Football fans will substitute NCAA football for NFL football. This will lead to increased revenues for industries associated with college football teams. All of these factors will have an impact on the owners of NFL teams. Owner's profits will be affected as revenue is lost in all areas of the industry. The NFL lock-out will have devastating effects on all parties involved.

critique of "effect of file sharing on record sales"

               I chose to critique this article because I have been considering the loss in revenue for the music industry from music piracy for a few years now. We are in the Era of Technology, hence why it is so fast and easy to download music for free. However, there is a dispute between researchers and music producers regarding the cause for loss of album sales. According to Harvard Business School professor Felix Oberholzer-Gee, music pirating is not the cause for the loss in music sales. In fact, the two are almost completely irrelevant.

                I agree with both Ty and Oberholzer-Gee that many teens and college students are constantly downloading illegal music. They claimed that this illegal downloading is actually a form of “free” promotion for artists’ music. In order for a radio station to play music, artists have to pay them a ton of money just for one song. However, this is how people are informed about the various artists and then they decide to go buy their album. Illegal downloading of music is essentially the same type of promotion as the radio, yet it doesn’t cost the artist anything to promote their music. When people (mainly high-school and college students) download songs off the internet, they are viewing a free sample of the artists’ music. Then, once they’ve decided that they are really interested in the artist, they will go buy the album. Hence why the first half of this year saw the number of illegal music downloads and music sales directly proportionally: they both increased.

                I really liked how Ty explained that the economics of the music production are characterized by significant fixe costs and because albums are now broken apart, the revenue earned from a new album is much lower. The music industry should consider strategizing or colluding with Itunes regarding their sales of individual songs. Itunes is a main source for music downloading across the nation; if the music industry negotiated a plan with Itunes, they might be able to regain their loss of sales from albums.

                Ty also did a nice job explaining the effect that advancements in technology have over the music industry. Unfortunately for artists, technology advancements are only going to increase in the future. Artists and firms affiliated with the music industry really need to consider coming up with a strategy fairly quickly to prevent the internet from these future technology advancements, such as enabling people to download full albums for free, not just singles. Maybe the music files online could allow potential consumers to preview the song online but not actually download it. This way they are able to hear the artist on their computer as well as on the radio, before they decide to purchase their albums. Another possible idea, although much more tedious, could be to set a limit on downloads per computer and/or per artist. Otherwise, I have no doubt that the internet will soon allow free downloading of albums; this will be a detrimental set back to the entire music industry across the world.

Critique of "The 'Best Buy' is somewhere else?"

I thought that this was a very good original blog post, but some of the explanations, to me, could have a been somewhat more in depth in economical terms. One of the downsides to Best Buy, is that it's not a producer of goods, but rather a retailer of goods. This means if the supply from one of Best Buy's manufacturers, such as Apple, is low, then both companies get hurt. Best Buy doesn't turn a profit, and Apple doesn't make money either. The down fall for companies to sell through retailers and not a company store, is that the retailer charges a higher price because if they did not, then Best Buy and other retailers would not make a profit. For Apple, or other manufacturers' stores, the parent company supports the store because of fast availability of product and no need to pay a retailer for selling the good. This is the more expensive method, but the most cost effective. Best Buy prices are higher because they wouldn't make any profit if they weren't charging higher costs. According to game theory, then if one firm charges a higher price and the others are charging a lower cost, then the higher priced firm will suffer because of lesser profits. I think the point that made, "Do you really need 36,000 sq. feet to show that a tablet, smart phone and TV all work together? You don't." was very interesting in the fact that there is a lot of unused space in Best Buy stores and with other stores, there is less floor space, less employees and more products closer together, maximizing efficiency, reducing total cost and maximizing profit. I think that it would be interesting to put Circuit City and Best Buy next to each other and compare the trend of Best Buy to the former Circuit City. Potentially by seeing what had happened to Circuit City, Best Buy could right their wrongs before it is too late to become, yet again, an industry leader. I thought that this blog post was very insightful to see how prices that are higher than equilibrium can affect a firm. This makes me realize how useful game theories are as well. By charging lower prices than competitors, than you see the benefit when your competitors charge higher prices. I also thought that in the blog, more numbers could have been used to show how drastic the effects on the company actually are, instead of having to find them from the original website. Finally, overall, I thought it was a well structured blog and economically correct but I would have like to have seen more proof of how downhill the company is going in the post, maybe a comaprison of online to in-store retailers and potentially more terms in economics describing the situation.

Critique of Effect of File Sharing

The most recent encounter with the illegal downloading community was the federal court case in New York against LimeWire, a popular peer-to-peer file sharing website. The statement was “LimeWire has cost the music industry hundreds of millions of dollars in revenue.” Although this is the opinion of many within the music industry, Harvard Business School professor Felix Oberholzer-Gee and co-author Koleman Strumpf had contradicting findings. It was believed by researchers the majority of those who download over peer-to-peer networks are teens and college kids that do not have a major contribution to record sales, “money- poor but time-rich” is how the article put it. So even if the songs were not downloaded by file sharing within this particular group, the songs probably would not be purchased. Instead of file sharing being considered a substitute in the music industry, it could be considered a compliment. This is because research states the people who actually buy CD albums “sample” music from file sharing networks and become encourage to actually purchase the music. The radio is also considered a compliment because it provides a free sample for the consumer, but differs for the producer. Another positive attribute of peer-to-peer services is free advertising, while radio stations may charge high fees which decrease competition by pricing competitors out of the market file sharing networks eliminate the barrier and increase competition.
In the previous blog titled Effect of File Sharing on Record Sales a major point is brought up as to why record sales have seem to decrease in the music industry. Because specific songs can be purchased instead of the entire album, the overall profit of the album would be a lesser amount. A solution to this issue could be providing a cheaper total amount for the album then that of each individual song. Also, developing compliments to new technological advances instead of combatting them would benefit the music industry. The highly competitiveness within the music industry makes it necessary to develop strategies to compete with the online file sharing networks, but in agreement with the preceding blog efforts should be made to feed off these newer developments which the firm might benefit more by producing a larger profit.

critique of "effect of file sharing on record sales"

I agree that online file sharing greatly affects the music industry in regards to record sales. Why would someone pay ninety-nine cents for a song or fifteen dollars for a whole CD when they can download the same song or CD, often times with the same sound quality, off the internet for free? I can imagine that online file sharing would be detrimental to an artist’s record sales. It is interesting that professor Felix Oberholzer-Gee found that most people only download the hit song, rather than the entire album. This conclusion of Oberholzer-Gee’s makes me question whether record sales can include both the profits made from the sale of a single song, and from the sale of the entire album.

I agree with Ty that the economics of the music industry is affected by the rapid growth of technology. I think it is time, with the growing music industry and the even faster growing world of technology, to start to look at online file sharing as its own market. Each online file sharing service (itunes, rhapsody, etc.) would be considered its own firm. The competition between online file sharing services and tangible stores (best buy, Barnes and Noble, etc.) has become too weighted on the online file sharing side for this market to be considered fair competition among similar firms. I think it would be interesting to watch the effects of putting the online services into their own market, and then leaving the Best Buys and Barnes and Nobles to their own market and competition.

The data that supports the conclusion that peer-to-peer online sharing sites directly collate to the increase in the music industry’s record sales suggests that it would be in the music industry’s best interest to try and control these peer-to-peer online sites. If the music industry would be able to control these sites (somehow profiting from the activity that is already generated) then the online file sharing world would no longer be such a mystery to record sales. The music industry would then be able to create an oligopoly market. In this oligopoly the music industry would have a great hand in promoting their product (the various songs/albums) because as the Harvard research concluded, the peer-to-peer websites boosted record sales. These websites served as a “sampler” to the artists’ work.

Due to people now downloading, therefore being more interested in, only single songs rather than an entire album, maybe it would be beneficial for the music industry to expect more profits from their singles rather than the entire album. Artists used to release “single CDs” separate from their entire album, maybe a look back at this marketing strategy would be beneficial not only to the artist, but the record company as a whole as well.

NFL Lockout Critique

I choose to critique Stephanie’s article primarily because it is a topic of interest for me and I had never considered the affects an NFL lockout would have on the economy. I felt that she did a great job of explaining the current issue between owners and players and the repercussions that would be associated with a lock-out. I also thought that she did a great job of tying the article with the things we have learned in class so far. The only thing I was curious about was the paragraph about the fans tickets being inelastic. I personally think that although there would be no NFL fans would be able to substitute NFL games for something else. Whether a new football league is formed, college athletics strive, or a different sports team in each city increases popularity, I feel that the money originally spent towards the NFL would be equally spent other places. Perhaps, because viewing NFL games is a luxury, the economy may actually benefit from the absence of one major sports team. People may take the money they would spend on tickets and memorabilia and either save it or spread the money elsewhere around the city. In my opinion, the main issue with the NFL lockout would be with the decrease in jobs. The NFL players themselves would be fine because they have plenty of money to survive but unless a new league was started, the thousands of stadium workers and team employees would be at a loss. I liked how Stephanie explained that the NFL is a monopoly and that other firms and businesses would be affected by the loss of the league, I wish the article had explained that more thoroughly. I am curious of all of the people affected by a lockout, which businesses and people aside from those directly a part of the NFL would be affected the greatest. I could see how the “Sunday” businesses would be greatly affected by the loss of the NFL but I am curious what businesses would be affected that is not quite as obvious. I know that for most sports and television channels, Sundays in the fall are dominated by NFL games. Also Monday night football is one of the most watched television events in the nation and networks would have to try hard to find a replacement. Of all of the articles I have read I felt she did the best job of tying her article in with what we learned in class. I think she chose a very interesting topic and I will continue to follow it into next fall and pray that I can watch my Giants on Sundays.

Critique on "Effect of File Sharing on Record Sales"

I chose to critique this article because I download a good amount of music myself, and never really realized the effects it had on today’s economy. Ty did a very good job at introducing the subject by presenting the broad topic of technology. Then he goes on to write that technology usually leads to greater productivity, in which he transitions into his main topic of how in the case of the music industry, it may be an exception. I found Ty’s second paragraph interesting because I, like many people, assumed that the increase in internet downloading led to less people buying cds, which in turn has lead to the decrease in record sales. The way he explained the actual reasoning for the decrease in record sales was a little confusing, and needed to be reread a couple of times. But when I understood it, it all came together. In Ty’s third paragraph, he nicely incorporated the notion of fixed cost and how that usually helped the industry of music to make money. He also did a good job of explaining that because you could download songs individually on iTunes, the revenue earned from albums has decreased. File sharing has made it so easy to break up albums, which would usually bring in large amounts of revenue as a whole. This was one thing that I found interesting about this article, I never really thought of how the money lost would add up to a significant amount of loss, revenue-wise. Ty ends his entry by presenting an alternative solution which could help bring revenues up by offering to put sales on a bundle of songs if you were to buy a good amount of the hit songs. He is trying to say that people want incentive to buy the whole cd. He makes a good example of how artists give away new releases to promote concerts. Ty writes that in order to help out sale records, industries need to find compliments for their record sales instead of substitutes. I feel like here he could have elaborated more on an economic level then he did. He could have also provided the reader with the compliment he wished to see happen and maybe an example of a substitute, as to show why the substitute was not a good alternative. All in all is was a very good article to choose because it was very relatable, and because this it did relate back to a current economic issue.

Telecommunications moves closer to Duopoly: Critique

Most mobile phone users are anxious about how the T-mobile/AT&T merger will play out. Many customers fear the lost of competition in the market will drive up prices. There are a number of sources that confirm this point of view. These sources also claim the price of wireless service has fallen during the last decade, but the ARPU (average revenue per user) is increasing. In essence, telecommunication firms are earning more due to the increased popularity of smartphones and it is likely phone service will cost more in the future.
However, there may be some positive outcomes from this merger. This critique explores possible benefits that could come out of an imperfect wireless market. Our textbook tells us imperfect competition is bad for the average consumer because firms can charge high prices and produce low outputs. Imperfect competition also prevents firms from entering the market. Thus, consumers are forced to buy from a select group of competing firms. After the merger, two large firms (AT&T and Verizon) will have almost complete control over the market. Those without a wireless provider will lose out because they will have to pay more for a new contract. On the other hand, both AT&T and T-mobile customers may see improved quality as a result of the merger. For example, if you are an AT&T costumer who lives in New York City, you will experience better service once the two firms merge. Lately, AT&T has struggled to keep up with the high demand in urban areas. Once the merger is finalized, AT&T users will be able to access T-mobile’s brand new backhaul network. This means faster internet connections and fewer dropped calls for both AT&T and T-mobile customers. Yes, the price of wireless service will go up, but the quality will improve as well.
Secondly, sources indicate that AT&T and Verizon will take part in a duopoly price game after the merger. In other words, both firms will constantly find ways to undercut each other. Our textbook (Economics19e) describes this phenomenon in detail on page 196. In a duopoly price game, each firm must decide weather to charge the normal price or lower price below marginal costs. A lower price will decrease a firm’s profits, but it will also work to throw the competing firm into bankruptcy. It is unlikely AT&T or Verizon will go bankrupt from a duopoly price war any time soon. Still, the merger is not entirely a bad thing. Some AT&T customers would prefer to pay more for better service.
Sources:
Samuelson, Paul A. & Nordhaus, William. 2010. Economics19e. The McGraw-Hill Companies: New York, NY

http://news.cnet.com/8301-30686_3-20046112-266.html

Sean Walsh - Critique

Critique of “The Supply & Demand of Gas” I thought that the beginning of Melissa’s analysis in the first two paragraphs was spot on. She began by introducing the topic to the audience and explaining the background information they would need initially to fully grasp the concept as it continued throughout the breakdown. She jumps right into explanation in the second paragraph by starting with specifically what recently has affected the market and in what ways. By bringing in statistics on the rise and fall of prices and market average, she paints a clearer picture for her audience and makes her explanation as visual as possible with careful word choice and easy to understand step by step progress. The second part of her second paragraph I thought was the best of the whole analysis. Especially for students of the class, her connection to the specific topics we go over in class that are at the crux of our course learning. The explanation of not only supply and demand in the context of what we learned in class, but also supply and demand in the article’s sense and the ways in which in correlates directly to the material we learn out of the text book were precisely what the guidelines for the submission indicated to include. The third and largest paragraph of the submission followed suit after the second in its precise and crisp analysis of the article. By combining the explanation on a national and more public level the crises of the natural disasters and turmoil that have been occurring recently with the more in depth analysis on terms of the material relevant to our class specifically, Melissa made an thick article on rising gas prices into a simple explanation of the facts that could be easily understood by anyone with any common sense about the concepts of supply and demand. The only small problem, and small in an almost insignificant sense was the closing. I thought the article choice as well as the whole explanation was so good and easy to read, I just thought that it deserved the proper analytical summary that left the readers with the whole sense of the depiction and not just the most recent words or the words that stuck out the most to them. The closing was fine and worked because the explanation was so good, but in my opinion I would have personally just liked that had the whole commentary topped off with the main points and the final sentences that leave the readers with the true sense of what the author was trying to say.