Where Apple Falls Short

Where Apple Falls Short

Written by: Renata Krieger

Under the multi billion dollar company made of strategic business choices and exceptional products lies their largest sunk cost: Apple TV.  After being on the market for several years, Apple TV has began to experience a decrease in demand for their product. When Apple TV was first created in the late 2000s, Steve Jobs had the vision of Apple TV becoming a success. However, since then other competitors have entered the market including Roku, Chromecast, and Netflix. According to Forbes.com, even though Apple is capable, the company is in no hurry to upgrade their system due to the sunk cost of their investment in Apple TV. Currently, if Apple were to invest more money into their TV portion of the company, this would be taking an extremely large risk due to the oligopoly market in which they compete in with Netflix, Roku, and Chromecast. For example, when looking at this from the perspective of the diseconomies of scale in the long run, this market for Apple TV would demonstrate decreasing returns to scale. As other firms in the market continue to increase their output, Apple will choose to be strategic by ignoring their sunk cost despite the amount of money they invested in previous years.

Next, with the billions of dollars in revenue each year from the iPhone alone, Apple has no incentive to upgrade their outdated interface within Apple TV. According to CBS News, as a whole, Apple doesn’t share the same passion for providing a TV service the same way Jobs did when he ran the corporation. With this disadvantage, other competitors are able to use the elasticity of demand within the market to their own advantage. As demonstrated within Chromecast, Google decides to keep their costs lower than Apple TV because this increases the demand for their product. Additionally, Google can afford this price decision more than Apple due to the success in the Chromecast revenue. With this, Apple TV is left with a higher price tag than their competitors due to the effects of their sunk cost.

Works Cited

Morris, Ian. “Apple TV Is A Huge Cash Cow, Which Is Why Apple Is In No Rush To Make It Better.” Forbes, Tech, 22 July 2014, www.forbes.com/sites/ianmorris/2014/07/22/apple-tv-is-a-huge-cash-cow-which-is-why-apple-is-in-no-rush-to-make-it-better/#102baf024d20.

Sherman, Erik. “Microsoft, Apple, Others Smack Themselves with Sunk Costs, Bad Decisions.” CBS News, CBS Interactive, 2 Nov. 2009, www.cbsnews.com/news/microsoft-apple-others-smack-themselves-with-sunk-costs-bad-decisions/.

Warren, Christina. “Welcome back, Apple TV. It's been a while.” Mashable, Mashable, 28 Oct. 2015, mashable.com/2015/10/28/apple-tv-review-2015/#qMjO1ksX_GqR.

California Under Fire

California Under Fire

By: Emily Burk

Northern California, a huge tourist destination for wine-lovers, is bouncing back following the severe wildfires that broke out in early October of this year. These regions of Northern California are finding their homes and business destroyed, the death tolls high and rising, a shortage of skilled contractors, and the costs facing them to be insurmountable, both implicit and explicit. The wildfires have caused a great deal of damage for many citizens, and the economic challenges facing them are not helping. Overall, Northern California has a long road ahead, with many obstacles along they way, and will need the government’s help. California must work to rebuild their businesses and counties  in order to keep the economy running and businesses open and making revenue.  Here are some of the largest obstacles Northern California will face following this disaster.

In lieu of the severe damage and destruction of homes and business, the demand for skilled contractors is soaring, while the supply, already low before the wildfires, is facing a huge shortage. This plight, is only increasing the demand, allowing for a higher revenue for the construction workers available, given the shortage. Additionally, Northern California is also facing a shortage of lumber resources, given the fires and high variable costs for the resources needed to rebuild homes and businesses. These costs are only expected to keep rising. Due to the shortages, this is only driving the total cost for consumers and business up even higher.     

Furthermore, the economic impact that the wildfires have on businesses in the wine counties such as Sonoma and Napa is huge. One source stated, “Napa also could see economic impacts due to its reliance on wine-related tourism. Several dozen wineries in the region were damaged or destroyed. In Napa Valley alone, visitors generated nearly $2 billion in spending in 2016,” according to research conducted by San Francisco-based Destination Analysts. With the destruction of businesses and tourism falling, business are losing revenue at a steady rate and facing both huge implicit and explicit costs. The costs alone to rebuild in those counties affected are taxing, but additionally the amount of time needed to rebuild their business is another challenge in and of itself, that will affect production and revenue of the business.  

Overall, these wildfires have many more impacts that just putting people out of their homes. The destruction of businesses, loss of revenue and tourism, cost of rebuilding and the production following, and the effects of supply and demand on the situation, show that Northern California needs to gear up for an economic battle. Northern California will need government and local help in the rebuild effort in order to keep their economies afloat.

Works Cited

Wotus, Matt, and Melissa Gray. “Toxic Ash, Debris Pose Risks after Wildfires.” CNN, Cable News Network, 28 Oct. 2017, www.cnn.com/2017/10/28/us/california-wildfire-cleanup/index.html.

Daniels, Jeff. “California Begins 'Historic Cleanup' from Fires but Faces Serious Hurdles in Rebuilding.” CNBC, CNBC, 26 Oct. 2017, www.cnbc.com/2017/10/26/california-begins-fire-cleanup-but-faces-serious-hurdles-in-rebuilding.html

Bonos, Lisa, et al. “Death Toll Continues to Rise as California Wildfires Burn On.” The Washington Post, WP Company, 15 Oct. 2017, www.washingtonpost.com/news/post-nation/wp/2017/10/14/more-californians-ordered-to-flee-as-gusting-winds-spread-wildfires/?utm_term=.1ca1b3d95e8f.

Billion Dollar Golfer

Billion Dollar Golfer

By Evan Turinske

Tiger Woods is considered to be one of the greatest golfers of all-time. He notched 14 major championship win, and over 70 PGA Tour wins. This gives him the highest career earnings ever for a golfer. He had earned more than 100 million dollars in his career from just  the PGA Tour events (Tiger). Tiger Woods has made most of his money from endorsements,approximately 1.16 billion dollars worth. The question that has come up, should Tiger Woods retire?

Tiger Woods should retire because continuing to golf professionally doesn’t benefit him. First, Tiger Woods’ implicit cost is his body. Tiger Woods has had some injuries: ruptured ACL, torn Achilles tendon, multiple pinched nerves in the spine, and multiple surgeries on his spine. Tiger Woods has had a long list of injuries and the injuries haven’t stopped. He is currently recovering from his latest back surgery. His explicit cost is that he has to pay for all these surgeries. He has to pay for the medicine they give him, the doctor bills, and any rehabilitation that is required. This will hurt his profit because now he has more costs. He has also lost revenue because he is playing golf not as well. Some of his endorsements are starting to stop sponsoring him. He has also lost some endorsements because of scandals he has been involved in. All of these make his cost increase because with one of the scandals he got divorced. Tiger Woods had to pay 100 million dollars in the divorce settlements (Finn).

Second, he is giving up a lot to play professional golf again. The opportunity cost is that he could be doing anything else after he retires. “This latest operation that Woods underwent typically prohibits its recipients from returning to full activity for roughly six months” (Babineau). The six months that he has to recover from the surgery so that he can play golf again, could be used to spend time with his family, go on vacation, or even do endorsements.  He is giving up a lot so that he can play golf again, but not gaining much from it. Most of his revenue is from endorsements. Only around 12% of his revenue is from playing professional golf events. He makes the most money from endorsement deals. His economic profit is a lot less than his accounting profit because he gives up time and opportunities to do other things than golf training. This all affects his economic profit and makes it a lot worse than his accounting profit.

Tiger Woods should retire because his body is taking a massive toll. His implicit cost and his explicit cost will keep rising because of the more injuries he gets, the more money he will have to pay. Also, the implicit cost rises when he gets more injuries. Also, Tiger Woods already makes more of his money from endorsements, so he can do more endorsements instead of golf. Tiger Woods should retire now because he will be remembered for his greatness and not for how bad he is right now.

Works Cited

Babineau, Jeff. “Column: Tiger Woods Future Fades Faster with Latest Back Surgery.” Golfweek, 20 Apr. 2017, golfweek.com/2017/04/20/tiger-woods-back-surgery-golf-future/.

Finn, Natalie. “Tiger Woods' Life Never Went Back to Normal After His Cheating Scandal.” E! Online, E! News, 27 Oct. 2017, www.eonline.com/news/858507/tiger-wood-s-life-hasn-t- been-the-same-since-his-cheating-scandal-all-the-highs-lows-leading-up-to-his-dui-arrest.

Rovell, Darren. “Tiger Hits $1.3 Billion in Earnings.” ESPN, ESPN Internet Ventures, 7 Jan. 2014, www.espn.com/golf/story/_/id/10257010/tiger-woods-hits-13-billion-career-earnings- report-says.

“Tiger Woods Tops $100 Million in Earnings.” Golf.com, 10 Sep. 2012, www.golf.com/tour-and-news/tiger- woods-tops-100-million-earnings.

Aaron Rodgers injury loses Packers more than just games

Aaron Rodgers injury loses Packers more than just games

David Collins

With the Green Bay Packers being one of the leading teams in the NFL the ticket prices for admission are usually pretty high. In recent events the normal ticket price went down due to many injuries in the Green Bay's starting offense and defense, but the most famous injury is the possible season ending injury Aaron Rodgers. With the broken collar bone it leaves the Packers in a tough position putting their backup quarterback in, in one of the most important positions on the team. This makes the demand to want to go see the Packers play go down.

With the recent injury it caused tickets prices to plummet down by more than 100 dollars on the low end. The average of the lowest get-in cost last week was $245, with lowest prices ranging from $213 to $325. This week against the Saints the average was $149 and the range $119 to $187. This makes the game more affordable on the good side for average families but on the negative side the games aren't as in high of demand to see since the star player is gone. Even with these great drops in tickets prices the NFL and Green Bay are not suffering too much in the way each ticket is still very expensive in relationship to an average sporting event ticket. With the average attendance at over 70,000 fans at home Packer games the loss in revenue is over 7 million dollars per home game. The supply in tickets will never be going down for the games but the attendance and buying of the tickets will be much lower. This injury doesn’t impact the other teams as much when they are away as the home crowds for them are still excited to see them play; the only big loss is when the Packers have home games. The Packers are predicted to hopefully bring the attendance backup with the price of tickets going back up as well in the coming weeks according to head coach Mike McCarthy. This is all depending on how the Packers will play with their backup in. In the end if the Packers were to stay at this rate over the rest of the season (With Rodgers predicted season ending injury) at home games the Packers would be predicted to lose over $28,000,000 in ticket prices alone. But with the efforts of the Packers and Hudley (Aaron’s new backup) they can hopefully liit the loss in ticket price drop and keep the attendance high.

Work Cited

Ryman, Richard. “Aaron Rodgers' collarbone injury a factor in drop in Packers ticket prices.” Press Gazette Media, Green Bay Press Gazette, 17 Oct. 2017, www.greenbaypressgazette.com/story/news/2017/10/17/aaron-rodgers-collarbone-injury-factor-drop-packers-ticket-prices/767984001/.

Barnwell, Bill. “Life without Aaron Rodgers: How Packers can survive -- with help.” ESPN, ESPN Internet Ventures, 16 Oct. 2017, www.espn.com/nfl/story/_/page/Barnwellx171016/layers-aaron-rodgers-collarbone-injury-whether-green-bay-packers-hang-make-2017-nfl-playoffs-nfc-north.

ESPN, ESPN Internet Ventures, www.espn.com/nfl/attendance.

Netflix Increases its Prices: Is it worth it?

Netflix Increases its Prices: Is it Worth It?

By Leila Gabrys

It’s no argument that Netflix has been delivering exceptional entertainment to its subscribers in the past couple of years.  However, the price of the standard subscription to Netflix increased from $9.99 per month up to $10.99 in November of this year. This is mainly because the multi-billion dollar industry plans to release dozens of new shows in 2018. This is a main factor of the increase in demand by most subscribers. Though slightly annoying to subscribers, people, including my family, are still very willing to add on their extra dollar every month to be able to binge this new content. The hype that hit shows such as Stranger Things and 13 Reasons Why have brought to Netflix’s reputation has definitely set the stakes high for other video streaming companies to match.

This is not the first time the company has increased its subscription price. In 2011, the company chose to up their price from $9.99 to $16, which provided the packaged deal of the standard shipping of DVDs in the mail and the online streaming. This being a 60% increase in the price led to a total loss of 800,000 subscribers, stalling their economic growth, according to the Huffington Post. In 2015, Netflix also upped its lowered price of the standard $7.99 to the current price of $9.99.

However, Netflix has discovered newer ways of providing entertainment: by producing shows itself. 2016 was one of Netflix’s biggest years, as it released the first season of the hit show Stranger Things (seen above) and the second season of Narcos. The company gained 3.6 million subscribers and a record of $2.15 billion in revenue the third quarter, just after the release of these two shows. "Stranger Things is also notable as it is produced and owned by Netflix, which provides us with more attractive economics and greater business and creative control," says the company, according to The Verge. Netflix used this strategy of creating more original shows this past year, including 13 Reasons Why and The Crown, and plans to continue with it throughout 2018.

Because of the increase in upcoming content this next year, it’s no surprise that Netflix is upping the price to expand their budget. Sandra Gonzales via Twitter writes, “Ted Sarandos says Netflix's content budget will be "closer to $7 billion" next year.” It’s in the news that the company strategically planned their up in price to be in effect just before the release of the sophomore season of Stranger Things on October 27th. The recent final trailer has most people on the edge of their seats, itching to binge the new content fans have been waiting for for a year and a half. Planning to the up the price just before the release is a clever idea to squeeze the cash out of people’s pockets. The newer features have also been a factor in the cost of a standard subscription, such as downloads and interactive content, according to Mashable. However, not even these great features and extraordinary shows and movies can keep everyone a loyal Netflix binger. The up in the price causes competition with other video streaming services such as Amazon's Prime Video and HBO Now, which offer different shows and features. However, most people don’t need to think about this opportunity cost too much before deciding the Netflix arguably delivers the best and most exclusive content as a whole.

Netflix began informing its subscribers on October 19th of the increase, just 30 days in advance before the price actually goes up, according to their billing cycle. In their third quarter, Netflix reported having 109.25 million subscribers, which we may see a change in due to this increase. However, if Netflix continues to live up to their extremely high reputation and deliver exceptional shows, the company will see increase in profit, and therefore, hopefully an increase in subscribers.

Works Cited

Abbruzzese, Jason. “Netflix Is Raising Its Prices, Again.” Mashable, Mashable, 5 Oct. 2017, <http://mashable.com/2017/10/05/netflix-raising-prices-again/#w.goyvcCIsq0>

Gilbert, Jason. “Netflix Account Losses Much Higher Than Expected After Pricing Backlash.” The Huffington Post, TheHuffingtonPost.com, 24 Oct. 2011, <www.huffingtonpost.com/2011/10/24/netflix-account-losses-q3-2011_n_1029269.html>

Katz, Brandon. “Netflix Price Increase Leading To 500,000 Cancellations?” Forbes, Forbes Magazine, 13 July 2016, <www.forbes.com/sites/brandonkatz/2016/07/13/netflix-price-increase-leading-to-500000-cancellations/>

O'Brien, Sarah Ashley. “Netflix Is Raising Its Prices.” CNNMoney, Cable News Network, 5 Oct. 2017, <http://money.cnn.com/2017/10/05/technology/business/netflix-price-increases/index.html>

Pereira, Chris. “Netflix Has Increased Its Price In The US Ahead Of Stranger Things: Season 2 Release.” GameSpot, Gamespot, 8 Oct. 2017, <www.gamespot.com/articles/netflix-has-increased-its-price-in-the-us-ahead-of/1100-6453809/>

Popper, Zoya Teirstein and Ben. “Led by Stranger Things and Narcos, Netflix Reports Record Revenue.” The Verge, The Verge, 17 Oct. 2016, <www.theverge.com/2016/10/17/13305338/netflix-earnings-3rd-quarter-q3-2016>

World Series Economics

Gracie Bierce

Mr. Reuter

Economics A4

24 October 2017

World Series Economics

As we get ready to kick off the upcoming World Series, we see a lot of economic factors at play. This year, with the Houston Astros and LA Dodgers in the final games, these two host cities will see an immediate rise in hotel prices when the games travel to each place. According to VisitKC.com, “During the 2014 World Series, every home playoff game brought around $5 million to Kansas City.” This is the number for each individual home game, which takes into account tickets for the game, cost of staying in a hotel, food, etc. When the World Series took itself to Cleveland, hotels that are located downtown skyrocketed the price of their rooms to $600 and up during this week.

Another economic factor that plays a role in the World Series is the continuing, ever growing price of tickets for admission into the games. Last year, tickets for the World Series, eventually won by the Cubs, had an average list price dipping slightly above $5000, gave a large economic surplus to the cities that participated. According to Times.com last year's championship game not only had the largest revenue of World Series games, but “they’re the most expensive Game 7 tickets in all sports history” (“Tonight’s”). Putting that into perspective, the closest runner up was the Cavs versus the Warriors in their championship basketball game.

Hotels and tickets are not the only things that benefit the economy for the cities involved in the World Series; small businesses and bars within a close vicinity to the stadium are benefitting on allowing people inside to watch the game on tv. Last year in Chicago, some establishments had a range of cover charges that were anywhere from $100-$1000 just to get inside; not including any food or drink. Getting in on the action, some parking garages were charging upwards of a hundred dollars just for a parking spot close to the stadium.

Overall, events such as the World Series bring in millions of dollars for the cities participating. Hotels, ticket sellers and businesses surrounding the park all have a surplus in sales this week. These sporting events only bring a positive impact to the city’s economies, but a negative impact on the fans’ wallets.

Works Cited

Roddy, Tom. “Why the 2017 World Series Will Be Record-Breaking before a Game Is Even Played.” Newsweek, 24 Oct. 2017, www.newsweek.com/world-series-2017-la-dodgers-houston-astros-691471.

Scipioni, Jade. “Being a World Series Host Doesn't Bring as Much Cash as You Think.” Fox Business, Fox Business, 20 Oct. 2017, www.foxbusiness.com/features/2017/10/20/being-world-series-host-doesn-t-bring-as-much-cash-as-think.html.

“World Series Tickets: Record High Game 7 Cubs-Indians Prices | Money.” Time, Time, time.com/money/4554794/world-series-game-7-cubs-indians-ticket-prices/.

“World Series: Four Facts That Make the Astros-Dodgers Clash Historic.” USA Today, Gannett Satellite Information Network, 23 Oct. 2017, www.usatoday.com/story/sports/mlb/2017/10/22/world-series-four-facts-make-astros-dodgers-clash-historic/788248001/.

“World Series: Houston Astros at Los Angeles Dodgers (Game 1 - Home Game 1).” Vivid Seats, www.vividseats.com/mlb-baseball/world-series-tickets.html.

Bad Weather Effects the Economy

Mr. Reuter

Economics A4

22 October 2017

Bad Weather Effects The Economy

Living in Wisconsin, we experience a wide variety of weather. This weather affects not only the citizens, but the economy. However, bad weather can have either a positive or negative impact on the economy. They can cause employees to stay home from work, citizens to stock up on essentials, or companies to thrive.

When storms are severe, especially in the winter, people believe that the safest option is to stay in their homes. Therefore, some people are unable to report to their jobs. This can negatively impact revenue. It can also hurt the company that the people work for, as they are missing some of their employees. For example, fast food restaurants. If their employees are unable to get to work due to the weather, they won’t have enough people to make the food or tend to the customers that did leave their homes. Also, since people are staying home, they aren’t out shopping as usual; this causes a loss in sales, as well as revenue.

As you can see in the graph, there were 800 thousand men and women that missed work in the winter of 1995-1996. This was due to a massive blizzard in the United States. The east coast received 4 feet of snow in two days.

Additionally, impending severe storms can cause citizens to panic. They will go out before the storm hits to fill up their gas tanks and stock up on essentials such as food, water and flashlights, in case of a power outage (Xu). This is good for the economy as the demand for these essentials is higher and companies will supply more. Another essential during winter storms in Wisconsin is salt. Since salt is a necessity during this season, salt companies supply large amounts in order to meet the demand, which will help the company sell more of their product.

Some companies thrive off of severe storms because they help to make the storm more bearable for the people affected. An example of this would be Generac. Generac is an American manufacturer of backup generators for homes and businesses. During storms, people often lose power, and Generac can help prevent that by detecting a loss of power and turning on automatically. This will not only help Generac gain revenue, but it will help companies to keep revenue during the storms as the generators will keep them running as usual. So, while most people fear storms, Generac is thriving. Since storms are inevitable, the supply and demand of these generators will never cease to exist.  

Overall, severe storms are inevitable and will continue to affect the economy. They could impact the economy negatively by preventing employees from working. The economy could also thrive as citizens are stocking up on essentials, or companies, like Generac, are selling more of their product.

Works Cited

“Blizzard? Here's the Weather Effect on the Economy You're Not Thinking Of.”

nomore10minutebreaks, 23 Jan. 2016,

nomore10minutebreaks.wordpress.com/2016/01/23/blizzard-heres-the-weather-e

ffect-on-the-economy-youre-not-thinking-of/.

David Zanoni Momentum, growth at reasonable price, long-term horizonMomentum at a

Reasonable Price.cls-1{fill:#024999;}. “A Company Thriving From Hurricane Sandy.”

Seeking Alpha, 29 Oct. 2012, seekingalpha.com/article/957841-a-company-thriving-from-hurricane-sandy.

“North American blizzard of 1996.” Wikipedia, Wikimedia Foundation, 12 Oct. 2017,

en.wikipedia.org/wiki/North_American_blizzard_of_1996.

Xu, Amelia. “5 Ways the Weather Affects the Economy.” SmartAsset, 3 Feb. 2017,

smartasset.com/mortgage/5-ways-the-weather-affects-the-economy.