Suppose instead that Ford’s growth of firm sales is expected to be –3% and the growth of industry Laura James is the head portfolio manager for National Fund, a U.S. based mutual fund with a well-respected track record. National’s primary focus is on large-cap domestic equities, and the fund has consistently posted highreturns relative to its peer group over the past seven years. Much of National’s recent success is from itsinvestments in the U.S. automobile industry, which have posted extraordinary returns due to a favorable economic scenario. Over the past seven years, the U.S. economy has been expanding, foreign competition has not met consumer expectations, and oil prices have remained low. These factors have contributed to an increase in market share for the domestic producers (at the expense of foreign competitors), and the result has been strong earnings for the top U.S. automakers. Ford Motor Company, in particular, has enjoyed tremendous success in this environment. Ford has capitalized on the trend toward bigger vehicles, particularly sport utility vehicles (SUVs), and has outperformed the other domestic auto makers. Ford jumped on the SUV bandwagon early, and established its dominance. Other domestic auto makers followed, with foreign producers being the last to embrace the trend. Ford, has increased its market share in an increasingly competitive industry. James is constantly reviewing economic forecasts and industry data in order to assess the expected performance of the investments in National’s portfolio. Due to changes in economic policy and recent volatility in energy prices, James now believes that current market conditions exhibit signs of contraction (recession). In addition, the automobile sector may be facing additional negative factors. In particular, James has concerns regarding the SUV segment of the automobile industry. Although she believes they will remain popular, she is concerned that the market may be reaching a point of saturation. In addition, volatile energy prices may dampen consumers’ enthusiasm for large vehicles. Lastly, foreign competitors have increased efforts toward the production of SUVs, thus “crowding” the market with many new models. Part 4) Suppose instead that Ford’s growth of firm sales is expected to be –3% and the growth of industry sales is 1%. What is Ford’s expected change in market share? A)3%. B)-3%. C)-4%. D)4%.