Outline a plan that will assess the effectiveness of the market structure for the company’s operations.
Using the regression results and the other computations from Assignment 1, determine the market
structure in which the low-calorie frozen, microwavable food company operates.
Use the Internet to research two (2) of the leading competitors in the low-calorie frozen, microwavable
food industry, and take note of their pricing strategies, profitability, and their relationships within the
industry (worldwide).
Write a six to eight (6-8) page paper in which you:
Outline a plan that will assess the effectiveness of the market structure for the company’s operations.
Note: In Assignment 1, the assumption was that the market structure [or selling environment] was
perfectly competitive and that the equilibrium price was to be determined by setting QD equal to QS.
You are now aware of recent changes in the selling environment that suggest an imperfectly competitive
market where your firm now has substantial market power in setting its own “optimal” price.
Given that business operations have changed from the market structure specified in the original scenario
in Assignment 1, determine two (2) likely factors that might have caused the change. Predict the primary
manner in which this change would likely impact business operations in the new market environment.
Analyze the major short run and long cost functions for the low-calorie, frozen microwaveable food
company given the cost functions below. Suggest substantive ways in which the low-calorie food
company may use this information in order to make decisions in both the short-run and the long-run.
TC = 160,000,000 + 100Q + 0.0063212Q2
VC = 100Q + 0.0063212Q2
MC= 100 + 0.0126424Q
Determine the possible circumstances under which the company should discontinue operations. Suggest
key actions that management should take in order to confront these circumstances. Provide a rationale
for your response. (Hint: Your firm’s price must cover average variable costs in the short run and average
total costs in the long run to continue operations.)
Suggest one (1) pricing policy that will enable your low-calorie, frozen microwavable food company to
maximize profits. Provide a rationale for your suggestion.
(Hints:
In Assignment 1, you determined your firm’s market demand equation. Now you need to find the inverse
demand equation. Having found that, find the Total Revenue function for your firm (TR is P x Q). From
your firm’s Total Revenue function, then find your Marginal Revenue (MR) function.
Use the profit maximization rule MR = MC to determine your optimal price and optimal output level now
that you have market power. Compare these values with the values you generated in Assignment 1.
Determine whether your price higher is or lower.) Outline a plan, based on the information provided in the scenario, which the company could use in order
to evaluate its financial performance. Consider all the key drivers of performance, such as company
profit or loss for both the short term and long term, and the fundamental manner in which each factor
influences managerial decisions.
(Hints:
Calculate profit in the short run by using the price and output levels you generated in part 5. Optional:
You may want to compare this to what profit would have been in Assignment 1 using the cost function
provided here.
Calculate profit in the long run by using the output level you generated in part 5 and cost data in part 3
and assuming that the selling environment will likely be very competitive. Determine why this would be
a valid assumption.)
Recommend two (2) actions that the company could take in order to improve its profitability and deliver
more value to its stakeholders. Outline, in brief, a plan to implement your recommendations.
Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not qualify as
an academic resource.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides;
citations and references must follow APA or school-specific format. Check with your professor for any
additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name,
the course title, and the date. The cover page and the reference page are not included in the required
assignment page length.
The specific course learning outcomes associated with this assignment are:
Analyze short-run and long-run production and cost functions.
Apply macroeconomic concepts to changes in global and national economies and how they affect
economic growth, inflation, interest rates, and wage rates.
Evaluate the profit-maximizing price and output level for given operating costs for monopolies and firms
in competitive industries.
Use technology and information resources to research issues in managerial economics and globalization.
Write clearly and concisely about managerial economics and globalization using proper writing
mechanics.
structure in which the low-calorie frozen, microwavable food company operates.
Use the Internet to research two (2) of the leading competitors in the low-calorie frozen, microwavable
food industry, and take note of their pricing strategies, profitability, and their relationships within the
industry (worldwide).
Write a six to eight (6-8) page paper in which you:
Outline a plan that will assess the effectiveness of the market structure for the company’s operations.
Note: In Assignment 1, the assumption was that the market structure [or selling environment] was
perfectly competitive and that the equilibrium price was to be determined by setting QD equal to QS.
You are now aware of recent changes in the selling environment that suggest an imperfectly competitive
market where your firm now has substantial market power in setting its own “optimal” price.
Given that business operations have changed from the market structure specified in the original scenario
in Assignment 1, determine two (2) likely factors that might have caused the change. Predict the primary
manner in which this change would likely impact business operations in the new market environment.
Analyze the major short run and long cost functions for the low-calorie, frozen microwaveable food
company given the cost functions below. Suggest substantive ways in which the low-calorie food
company may use this information in order to make decisions in both the short-run and the long-run.
TC = 160,000,000 + 100Q + 0.0063212Q2
VC = 100Q + 0.0063212Q2
MC= 100 + 0.0126424Q
Determine the possible circumstances under which the company should discontinue operations. Suggest
key actions that management should take in order to confront these circumstances. Provide a rationale
for your response. (Hint: Your firm’s price must cover average variable costs in the short run and average
total costs in the long run to continue operations.)
Suggest one (1) pricing policy that will enable your low-calorie, frozen microwavable food company to
maximize profits. Provide a rationale for your suggestion.
(Hints:
In Assignment 1, you determined your firm’s market demand equation. Now you need to find the inverse
demand equation. Having found that, find the Total Revenue function for your firm (TR is P x Q). From
your firm’s Total Revenue function, then find your Marginal Revenue (MR) function.
Use the profit maximization rule MR = MC to determine your optimal price and optimal output level now
that you have market power. Compare these values with the values you generated in Assignment 1.
Determine whether your price higher is or lower.) Outline a plan, based on the information provided in the scenario, which the company could use in order
to evaluate its financial performance. Consider all the key drivers of performance, such as company
profit or loss for both the short term and long term, and the fundamental manner in which each factor
influences managerial decisions.
(Hints:
Calculate profit in the short run by using the price and output levels you generated in part 5. Optional:
You may want to compare this to what profit would have been in Assignment 1 using the cost function
provided here.
Calculate profit in the long run by using the output level you generated in part 5 and cost data in part 3
and assuming that the selling environment will likely be very competitive. Determine why this would be
a valid assumption.)
Recommend two (2) actions that the company could take in order to improve its profitability and deliver
more value to its stakeholders. Outline, in brief, a plan to implement your recommendations.
Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not qualify as
an academic resource.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides;
citations and references must follow APA or school-specific format. Check with your professor for any
additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name,
the course title, and the date. The cover page and the reference page are not included in the required
assignment page length.
The specific course learning outcomes associated with this assignment are:
Analyze short-run and long-run production and cost functions.
Apply macroeconomic concepts to changes in global and national economies and how they affect
economic growth, inflation, interest rates, and wage rates.
Evaluate the profit-maximizing price and output level for given operating costs for monopolies and firms
in competitive industries.
Use technology and information resources to research issues in managerial economics and globalization.
Write clearly and concisely about managerial economics and globalization using proper writing
mechanics.
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