When Videocassette Recorders First Became Popular in the Mid-1980s,a New

question 47

Essay

When videocassette recorders first became popular in the mid-1980s,a new form of "mom and pop" small business sprang up across the country: the video rental store. At the time,new videotapes of popular movies cost anywhere from $80 to $200. As the popularity of videocassette players grew,these small,independent video rental stores grew rapidly to meet the demand of consumers for inexpensive movie rentals. There was considerable competition between stores to be the first to have new movies available for rental. However,some stores disappointed customers by not having enough copies of new films when they were most in demand. Within about five to eight years of competition,most of these mom and pop video rental stores were ultimately put out of business by the large regional,and then national,chains,such as Blockbuster. Using the concept of sustainable competitive advantage along with the four conditions required to produce it,explain how such a transition from hundreds of independent mom and pop video stores to a few national chains could have taken place so quickly.

Apply the concept of discounted cash flow to ascertain the present value of future payments.

Understand the calculation of return on investment (ROI) in short-term financial instruments.

Analyze the benefits of different savings and loan payment options under varying interest rate scenarios.

Understand and calculate the effects of capitalizing interest on student loans.

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Definitions:

Noncash Gifts

Contributions or presents given in forms other than cash or currency, including physical goods, services, or other intangible assets.

Diminishing Marginal Utility

This refers to the economic principle that as a person increases consumption of a product, there is a decline in the marginal benefit that person gains from consuming each additional unit of that product.

New Features

New features refer to additional or enhanced attributes introduced to a product or service to improve its functionality or appeal.

iPads

A line of tablet computers designed, developed, and marketed by Apple Inc., which run the iOS and iPadOS mobile operating systems.