Figure 12.4 Rainbow Writer (RW)is a Small Online Company Selling a Highly

question 71

Multiple Choice

Figure 12.4

Rainbow Writer (RW) is a small online company selling a highly rated software package for printing color labels directly onto CDs. The firm currently earns a profit of $2 million per year selling its package exclusively on its Web site. Odeon, the producer of the most popular software package for editing and burning CDs and DVDs, has expressed interest in bundling Rainbow Writer's product into its own package. Odeon expects that bundling would further boost its sales and allow it to sell the new bundled product at a higher price, thus raising its profits beyond its current profit of $12 million. Figure 12.4 shows the decision tree for the Rainbow Writer-Odeon bargaining game.
-Refer to Figure 12.4.How will Rainbow Writer respond to Odeon's two possible offers?

• A)Rainbow Writer will reject either offer.
• B)Rainbow Writer will only accept an offer of $30 per copy of the software package.
• C)Rainbow Writer will only accept an offer of $40 per copy of the software package.
• D)Rainbow Writer will accept either offer.

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Definitions:

Political Barriers

Refers to government-imposed restrictions that affect international trade and investment.

Philanthropic

Pertaining to the act of donating money, goods, time, or effort to support a charitable cause, often without expecting anything in return.

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Pertains to the system of rules that are created and enforced through social or governmental institutions to regulate behavior, ensuring equity, justice, and fairness in society.

Corporate Social Responsibility

A business model where companies integrate social and environmental concerns in their operations and interactions with stakeholders.