market structures. Furthermore‚ this week has helped me in determining profit-maximizing strategies based on market structure analysis. Some of the most interesting things learned were the examples of monopolistically‚ oligopoly and monopoly. Keeping the concepts of Monopoly‚ oligopoly and perfect competition straight has proven to be a real challenge. The amount of information presented is overwhelming at times. I had to step back and reread several sections repeatedly to ensure a clear understanding
Premium Economics Monopoly Oligopoly
obtain the profit maximizing output quantity‚ we start by recognizing that profit is equal to total revenue (TR) minus total cost (TC). Given a table of costs and revenues at each quantity‚ we can either compute equations or plot the data directly on a graph. (Lipsey‚ 2011) Figure 1.Illustration of Profit Maximization using TR-TC Approach. A method in determining the Profit and the Loss of a certain Company is one of the fundamentals in Economics. The profit-maximizing output is the one at which this
Premium Monopoly Economics Oligopoly
Revenue is a slope c. Demand = Marginal Revenue = Average Revenue 6) If a firm is a price taker‚ then the demand curve for the film’s product is: a. Completely horizontal because the price will not change. Use the following graph to answer question 7: 7) Refer to the graph on the left for a firm in pure competition. Line A represents: a. The total revenue made from selling each extra unit of output as per the price at Line B. b. (Additionally‚ Line B is the demand curve‚ marginal revenue curve
Premium Monopoly Perfect competition Economics
GSK operates in an oligopolistic market. It is highly cash generative‚ with increased sales growth and shareholder returns. (Oligopoly) 3. Its main competitor is American pharmaceutical giant‚ Pfizer. Financially‚ GSK is not the best performer (with $108 bn compared to Pfizer’s $161 bn)‚ but it manages to differentiate itself‚ which is the key to success in an oligopoly‚ through a number of strategies which we will explore in this paper. (Pfizer) Vulnerability 1. Business vulnerability is
Premium Costs Economics Oligopoly
other driver is using their best strategy. c. Why is this game called a cooperative game? I believe that this game is a cooperative game because if one or both players don’t cooperate‚ then neither player wins. Cooperative oligopoly models are “interdependent oligopoly behavior that assume that firms explicitly or implicitly cooperate with each other to achieve outcomes that benefit all the firms” (Farnham‚ 2010‚ p. 490). 2. a. What is the firm’s Total Revenue? The firm’s
Premium Game theory Economics Nash equilibrium
always equals the marginal cost of production and each firm will produce in its average total cost or per-unit cost. This way firms can provide consumer with goods and services at the lowest price. In contrast with other markets structures such as oligopoly and monopolistic competition (both capable of keeping prices above marginal cost)‚ in a perfect competition market firms do not have market power over other firms. c. What is the difference between the concepts of diseconomies of scale‚ and the
Premium Monopoly Economics Perfect competition
A brief History The first oil deposits in India were found in Digboi‚ Assam in 1889. That is when India’s journey in the Petroleum Industry began. Post Independence‚ Oil India Limited was formed which was a joint venture involving the Indian Government and the British owned Burmah Oil Company (presently known as BP) whilst the Indo-Stanvac Petroleum Project in West Bengal was between the Indian Company and the American Company SOCONY-Vacuum (presently known as Exxon Mobil). This changed in 1956
Premium Petroleum
Chapter 10 (Tentative Due Date: by November 1) Question 2: Discuss the major barriers to entry into an industry. Explain how each barrier can foster either monopoly or oligopoly. Which barriers‚ if any‚ do you feel give rise to monopoly that is socially justifiable? LO1 The major barriers to entry in an industry are economies of scale‚ legal barriers such as patents & licenses and other strategic or pricing barriers. Economies of scale occur only in large firms who are able to reach a minimum
Premium Monopoly Microeconomics Economics
= a + b* Price (P) b = (350 – 420) / (20 – 25) = -70 / -5 = 14 Using: P = 25‚ Qs = 420 420 = a + 14 * (25) 420 = a + 350 420 – 350 = a Therefore a = 70 and the demand function would be: Qs = 70 + 14 * P b) Graph Showing Equilibrium Price Figure Note: From the graph above the equilibrium price is approximately $22.50 c) Economically speaking‚ the goal of a company is to maximize profit‚ and maximizing profit is not usually the same thing as maximizing revenue. Therefore‚ while it
Premium Costs Supply and demand Variable cost
monopolies‚ so preventing unfair business behaviours. Oligopoly – a small number of dominant firms or individuals compete to provide a product or service. Competition is limited and as a result‚ very closely related. Everything a competitor does directly affects your business. E.g. If one company drops its prices all the other businesses in the oligopoly are affected. Business decisions must always consider competitor’s influence / reaction. An oligopoly may agree to maintain artificially high prices
Premium Supply and demand Competition