- Create tables to illustrate costs and revenues for firm operating in a specific market structure
The following course outcomes are covered in this assignment:
Describe and analyze the principles of economics that apply to the functions of individual decision makers, both consumers and producers within the larger economic system (CO1)
Identify the nature and functions of product markets (CO2)
Describe the nature and functions of factor markets (CO3)
Apply graphs and tables to illustrate cost and revenue of firms in different market structures (CO4)
Describe the importance of economic analysis in real world situations. (CO6)
You have learned about the market structures of pure competition, monopoly, monopolistic competition, and oligopoly. In this assignment, you will apply this learning to create cost and revenue graphs for a business operating in one of these market structures. Hypothetical information should reflect characteristics of the market structure selected.
You are the manager of a firm producing a product in a specific market structure. Provide the following information:
- Describe your product and the specific cost components of your product. Make the distinction between the fixed and variable costs associated in the production of your product.
- Provide reasons why your firm meets the characteristics of a particular market structure. Explain how this impacts your ability to set price. Does your firm face a downward sloping demand curve? What price do you charge for your product and why?
- In a table using hypothetical data, please provide total fixed cost, average fixed cost, total variable cost, average variable cost, total cost, average total cost, and marginal cost schedules.
- In a second table, indicate your profit maximizing output using price, marginal revenue, and marginal cost schedules. What profit/loss does your firm earn/incur?