1. In Application 1.3, we looked at the Blockbuster chain of movie rental outlets. Can Blockbuster raise its prices for rentals above the competitive level because it is so large? Has the firm’s power to do so increased or decreased in recent years?
2. Although the home-movie rental industry has been an important source of income to firm studios in recent years, they still prefer to open their films in theaters and embargo them for a time until DVDs are released. Why do the studios follow this practice Can you think of other cases where products are released for sale in a piecemeal manner?