Group 1

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Group 1
Stephanie Fry
Jake Habel
Keith Horner
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Table of Contents

• Stephanie Fry
• History
• Factors of Production
• Opportunity Costs
• Substitutes/Effect
• Complements

• Jake Habel
• Demand
• Supply
• Price Elasticity
• Short Run/Long Run
• Profit Maximization

• Keith Horner
• Perfect Competition
• Monopoly
• Oligopoly
• Stock

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Cabelas History

• 1961 Dick Cabela starts home business
• 1964 Opens first store
• 1969 50,000 sq. ft. in Sidney,NE

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History Cont

• 1998 Headquarters open in Sidney
• 1998 Website Live
• 2004 Cabelas offer stock

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FACTORS OF PRODUCTION

• Land
• Labor
• Capital
• Entrepreneurial Activity

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LAND

• 8 states
• Expansion to 12 states in near future

• New Facilities
• Wheeling, WV
• Hamburg, PA

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LABOR

• The time spent producing goods and services by
  employees
• Cabelas employs 4,200 workers

8
CAPITAL

• Tools in which employees utilize for production
  of goods and services.
• Human Capital
• Skills, knowledge, training
• Physical Capital
• 10 stores

9
ENTREPRENEURIAL ACTIVITY

• The risk taken to make a productive enterprise by
  combining resources and realizing the
  opportunity.
• Jim and Dick Cabela

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OPPORTUNITY COSTS

• Explicit costs
• Costs of goods 93.7 million
• Salaries
• Implicit costs
• Possibilities to rent land/buildings
• Cabelas Investment
• Cabelas Labor

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SUBSTITUTES

• A good that could be used in place of another
  good and be fulfilling the same purpose.
• Browning
• Mathews
• Winchester

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SUBSTITUTION EFFECT

• Price of good falls, consumer purchases less of
  the substitute good.

Price falls then Quantity of Substitute is less

• Price of good rises, consumer purchases more of
  the substitute good.

Price rises then Quantity of Substitute is more
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COMPLEMENTS

• A good used in conjunction with another good.
• Example
• Bows ? Arrows
• Guns ? Bullets
• Fishing Rods ? Fishing Line

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DEMAND
15
SUPPLY
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PRICE ELASTICITY

• Demand EDChange in Quantity Demanded
• Change in Price
• Supply ES Change in Quantity Supplied
• Change of Price

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SHORT RUN

• Fixed Inputs quantity remains constant
• Machinery
• Number of Stores
• Variable Inputs quantity can be changed
• Labor
• Inputs Goods

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LONG RUN

• ALL inputs can be changed
• Technology enables more efficient production

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PROFIT MAXIMIZATION

• MCMR NO!
• Strategically Interdependent
• Prisoners Dilemma

CABELA'S
LOW PRICE
HIGH PRICE
75,000
-30,000
LOW PRICE
75,000
225,000
BASS PRO SHOP
225,000
150,000
HIGH PRICE
-30,000
150,000
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PERFECT COMPETITION?

• Many firms
• Price Takers
• No barriers to entry/exit
• MCMR
• No advertising

NO!!!
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MONOPOLY?

• One Firm
• Price Searcher
• Yes Barriers of Entry/Exit
• MCMR
• Advertising - sometimes

NO!!!
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OLIGOPOLY?

• Few firms
• Price Searcher
• Yes Barrier to Entry/Exit
• Strategically Interdependent
• Advertising If different product

YES!!!
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CABELAS STOCK

• June 25, 2004

• Open Price 24.45

• 52 week High 30.27

• 52 week Low 23.25

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WHAT WE LEARNED TODAY

• THE HISTORY AND NATURE OF CABELAS
• HOW CABELAS UTILIZES THEIR FACTORS OF PRODUCTION
• HOW DEMAND AND SUPPLY AFFECT CABELAS
• THE SHORT AND LONG RUN POSSIBILITIES OF CABELAS
• THE TYPE OF MARKET IN WHICH CABELAS OPERATES

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Thanks for Watching
Brought to you by Jake Habel Keith
Horner Stephanie Fry