1. Explain why a sizable market power of a company leads to higher profit?

What are
the factors that can enhance a company’s market power?
 Significant market power occurs when prices exceed marginal cost and long run
average cost, so the firm makes economic profit. ... Highly concentrated markets
may be contestable if there are no barriers to entry or exit, limiting the incumbent
firm's ability to raise its price above competitive levels.
2. In the early part of the twentieth century, one of the major exports on the
Philippines was abaca rope. Using Porter’s competitive forces, explain the
reasons for the deterioration of abaca as a major exports’ earner of the country?
 Despite the very bright prospects, the Philippine abaca—who once dominated the global
fiber world in the early 1900s to 1970s—found itself stalled from stiff competition
waged by Ecuador for raw materials and China for abaca-based products.
According to the Philippine Council for Agriculture, Forestry and Natural
Resources Research and Development (PCARRD) Ecuador almost stole the
export market in 2000 as it accounted for 40 per cent of the shipments while the
remaining 60% came from the Philippines. These figures are not too narrow

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which showed the local abaca’s vulnerability. Moreover, the country’s export rate

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at that time was 0.2 per cent while Ecuador is already enjoying a 2.3 per cent

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rate. FIDA shares that the country’s low yields was the foremost problem of the

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sector due to use of mixed varieties, lack of disease-resistant planting materials

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and postharvest facilities and fragmented research and development. Oddly,
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Ecuador sources its plants or abaca raw materials from the Philippines.
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3. What is the importance of knowing government regulations in your
business Enterprise?
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 All government regulations on business require companies to comply with

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federal, state, and local statues and regulations administered by legislative

vi y re

bodies and carried out by regulatory agencies. Some regulations impact the
ways in which businesses report income and pay taxes; others regulate how they
dispose of their excess materials or waste. For just about any kind of industry
and transaction, there are government regulations on business. The importance
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of knowing the government regulation in business is very important to all

ar stu

business Enterprise. This will help your business not to violate rules and
regulation of the government.

4. What is the significance of an increasing number of families receiving remittances

is

on the profitability of restaurant?

Th

 Besides pure monetary gains, remittances are associated with greater human
development outcomes across a number of areas such as health, edu- cation,
and gender equality. This money acts as a lifeline for the poor, increasing income
for individuals and families.
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