Market Structures And Demand: The Shape Of The Demand Curve

Market Structures And Demand Curvesthe Shape Of Demand Curves

Topic 1: Market Structures and Demand Curves The shape of demand curves firms face may change from one form of market structure to another. For instance, perfectly competitive oligopoly firms do not face the same demand curves due to various reasons. There are many dairy farmers in the world and also many Starbucks coffeehouses. Discussion Checklist: A. Why does a Starbucks coffeehouse face a downward–sloping demand curve while a dairy farmer has a horizontal demand curve? B. What other suppliers might face a downward–sloping demand curve? C. What implications does this have for their advertising budget as compared to suppliers with horizontal demand curves? Topic 2: Barriers to Entry and Competition There are a number of factors that influence the nature of firms, including the level of competition they may be involved in or may not be involved in at a given period. Barriers also shape the nature of the various forms of market structures. Discussion Checklist: A. How do barriers to entry impact the level of competition in a market? B. What might happen to the market price as greater barriers to entry come into existence? C. Not all barriers to entry are created through market conditions. Barriers to entry, such as patents, licenses, or international trade restrictions, may be government imposed. How do government–imposed barriers such as patents impact consumers and suppliers in these markets? Unit 6 [MT445 | Managerial Economics] Assignment: Oligopoly and Monopolistically Competitive Firms Student Name: In this Assignment, you will compute total cost, total revenue, and total profit/loss. Based on the computed results, you will determine the optimal quantity of output, which minimizes loss under a monopolistically competitive market. In addition, you will also evaluate the marketing strategies of oligopoly market firms. Instructions: Answer all of the following questions. You are required to follow proper APA format. Read the Criteria section below for more information before you begin this Assignment. 1. Do the firms in an oligopoly act independently or interdependently? Explain your answer. 2. A monopolistically competitive firm has the following demand and cost structure in the short run. Output Price FC VC TC TR Profit/Loss 0 $90 $90 $ 0 ____ ____ ________ 1 80 ____ 40 ____ ____ ________ 2 70 ____ 80 ____ ____ ________ 3 60 ____ 140 ____ ____ ________ 4 50 ____ 220 ____ ____ ________ 5 40 ____ 320 ____ ____ ________ 6 30 ____ 440 ____ ____ ________ 7 20 ____ 580 ____ ____ ________ a. Complete the table. b. What level of output maximizes profit or minimizes loss? c. Should this firm operate or shut down in the short run? Why? 3. Suppose that Wal-World and Tarbo are independently deciding whether to implement a new bar code technology or use the existing bar code. It is less costly for their suppliers to use one system and the following payoff matrix shows the profits per year for each company resulting from the interaction of their strategies. 1. Does Wal-World have a dominant strategy? Briefly explain. 1. Does Tarbo have a dominant strategy? Briefly explain. 1. Is there a Nash Equilibrium in this game? Briefly explain. Criteria · This Assignment should be written in Standard English and demonstrate exceptional content, organization, style, and grammar and mechanics. · Respond to the questions in a thorough manner, providing specific examples where asked. · Your sources and content should follow proper APA format (A title page is not required). (Review the APA formats found in the Kaplan Writing Center. To access the Kaplan Writing Center, select this link .). · Review the grading Rubric to ensure all points have been captured in the paper. References (add references in APA format below) Directions for Submitting your Assignment Complete your Assignment in this Word document. Submit your Assignment by the end of Unit 6 by clicking the Dropbox tab and select Unit 6: Assignment from the dropdown menu, then attach your file. Make sure to save a copy of your work and be sure to confirm that your file uploaded correctly. Unit 6 Assignment Content and Analysis Points Possible Points Earned Problem #1 Do the firms in an oligopoly act independently or interdependently? Explain your answer. 6 Problem #2 A monopolistically competitive firm has the following demand and cost structure in the short run. Complete the table (a) 16 What level of output maximizes profit or minimizes loss? (b) 4 Should this firm operate or shut down in the short run? Why? (c) 4 Problem #3 Does Wal-World have a dominant strategy? Does Tarbo have a dominant strategy? Is there a Nash Equilibrium in this game? Briefly explain. (a-c) 9 Writing style, grammar, and APA format. 6 Total of 4