Dedicated+assets

Jason Strachman This information was taken from //Managerial Economics and Business Strategy// by Michael R. Baye on page 209.


 * Dedicated assets** are general investments made by a firm that allow it to exchange with a particular buyer.

For example, a military weapons producer opens a new assembly line to manufacturer guns for the US Department of Defense. If opening the assembly line is only profitable if the government actually purchases the guns, the investment represents a dedicated asset. __Question 1:__ What is a dedicated assets? A. A formal relationship betweena buyer and seller that obligates the buyer and seller to exchange at terms specified in a legal document. B. General investments made by a firm that allow it to exchange with a particular buyer. C. Mechanism used to enhance workers' efforts. D. A measure of the difference between price and marginal cost as a fractice of teh product's price.
 * Answer is B**