American automakers buy auto parts from independent suppliers rather than produce the parts themselves. in the 1980s, chrysler got about 70 percent of its auto parts from independent suppliers, while ford got about 60 percent and general motors got 25 percent. a decade earlier, the proportions were 50 percent at chrysler, 5 percent at ford, and 20 percent at general motors. why did american automakers decide to outsource most of their parts production? explain why independent producers of auto parts are more efficient than the automakers.

Total marketing effort is a term used to describe the critical decision factors that affect demand: price, advertising, distribution, and product quality. define the variable x to represent total marketing effort. a typical model that is used to predict demand as a function of total marketing effort is based on the power function: d = axb suppose that a is a positive number. different model forms result from varying the constant b. sketch the graphs of this model for b = 0, b = 1, 0< b< 1, b< 0, and b> 1. (we encourage you to use excel to do this.) what does each model tell you about the relationship between demand and marketing effort? what assumptions are implied? are they reasonable? how would you go about selecting the appropriate model?