Suppose toyota and honda must decide whether to make a new breed of side-impact airbags standard equipment on all models. side-impact airbags raise the price of each automobile by $1,000. if both firms make side-impact airbags standard equipment, each company will earn profits of $3.5 billion. if neither company adopts the side-impact airbag technology, each company will earn $2 billion. if one company adopts the technology as standard equipment and the other does not, the adopting company will earn a profit of $4.5 billion and the other company will earn $0.5 billion.

Baldwin has negotiated a new labor contract for the next round that will affect the cost for their product bold. labor costs will go from $7.91 to $8.41 per unit. in addition, their material costs have fallen from $13.66 to $12.66. assume all period costs as reported on baldwin's income statement remain the same. if baldwin were to pass on half the new costs of labor and half the savings in materials to customers by adjusting the price of their product, how many units of product bold would need to be sold next round to break even on the product?

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Google started as one of many internet search engines, amazon started as an online book seller, and ebay began as a site where people could sell used personal items in auctions. these firms have grown to be so large and dominant that they are facing antitrust scrutiny from competition regulators in the us and elsewhere. did these online giants grow by fairly beating competition, or did they use unfair advantages? are there any clouds on the horizon for these firms -- could they face diseconomies of scale or diseconomies of scope as they continue to grow? if so, what factors may limit their continued growth?