Mt445 Unit 3 Assignment

Unformatted text preview: [MT445 | Managerial Economics] Unit 5 Assignment Student Name: Please answer the following questions. Submit as a Microsoft Word® document to the Dropbox when completed. 1. How does the demand curve faced by a perfectly competitive firm differ from the market demand curve in a perfectly competitive market? Explain. The demand curve faced by a perfectly competitive firm differs from the market demand curve in a perfectly competitive market because the perfectly competitive market is downward sloping because of the goods and services produced, The line is horizontal in a market demand curve because the market value sets the price. A firm will lose profits if they set the price below the market price. It does not matter how much a firm sells or provides it will not be able to affect the market price. http://www.cliffsnotes.com/more-subjects/economics/perfect-competition/demand-in-a-perfectly-competitivemarket [MT445 | Managerial Economics] 2. A perfectly competitive firm has the following fixed and variable costs in the short run. The market price for the firm’s product is $140. Output 0 1 2 3 4 5 6 a. FC $90 90 90 90 90 90 90 VC $ 0 90 170 290 430 590 770 TC __90_ _180__ _260__ _380__ _520__ _680__ _860__ TR Profit/Loss _0__ -50___ _140__ -40___ _280__ 20___ 420___ 40___ 560___ 40___ 700___ 20___ 840___ -20___ Complete the table. b. What level of output should the firm produce to maximize profits? 4 c. Assume this firm is making a loss when it produces its 7 th unit of output. What should the firm do in the short-run? The firm should produce more in the short run then cut back on the output. 3. How does the profit maximization condition for a monopoly differ from that for a perfectly competitive firm? How does this difference impact efficiency under each market structure? A monopoly will produce less and charge more and a perfectly competitive industry will produce more and charge less. The difference is monopoly causes dead weight and they lose money because their prices are set to high. 4. The following table provides market share information about the soft-drink industry. Company Coca-Cola Pepsi-Co Cadbury Schweppers Other Market Share 37% 35 17 11 [MT445 | Managerial Economics] a. Do you think the Department of Justice and the Federal Trade Commission would approve a merger between any two of the first three companies listed? Explain. No because it will increase market power. b. Do you think this market has barriers to entry? If so, what might they be? No I do not think they have barrier to entry because there is numerous soda industries out there. Directions for Submitting your Assignment Complete your Assignment in this Microsoft Word® document and save it as Username-MT445AssignmentUnit#.doc (Example:TAllen-MT445Assignment-Unit5.doc). Submit your file by selecting the Unit 5: Assignment Dropbox by the end of Unit 5. Unit 5 Assignment Content and Analysis Points Possible Problem #1 How does the demand curve faced by a perfectly competitive firm differ from the market demand curve in a perfectly competitive market? Explain. 8 Problem #2 A perfectly competitive firm has the following fixed and variable costs in the short run. The market price for the firm’s product is $140. Complete the table (a) 7 What level of output should the firm produce to maximize profits? (b) 4 Assume this firm is making a loss when it produces its 7th unit of output. What should the firm do in the short-run? (c) 4 Problem #3 How does the profit maximization condition for a monopoly differ from that for a perfectly competitive firm? How does this difference impact efficiency under each market structure? 8 Problem #4 The following table provides market share information about the soft-drink industry. (a-b) 8 Writing Style, Grammar, and APA Format. 6 Total 45 Points Earned [MT445 | Managerial Economics] ...
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[ MT445 | Managerial Economics ] Unit 7 Assignment Student Name: Colleen Egan Please answer the following questions. Submit as a Microsoft Word® document to the Dropbox when completed. Please answer the following questions. Submit as a Microsoft Word document to the Dropbox when completed. 1. Why does inflation make nominal GDP a poor measure of the increase in total production? Inflation makes nominal GDP a poor measure of the increase in total production because in any given year the quantities and prices of products are different. Real GDP keeps prices constant and uses a particular year to determine if there is an actual increase in the quantity of output that is produced. Price and output (quantity) changes are separated when considering real GDP, but not with nominal GDP. 2. Which component of GDP will be affected by each of the following transactions involving FlyCheap Airlines? If you do not believe any component will be affected, briefly explain why. i. You purchase a ticket on a FlyCheap Airlines to visit your niece. The component of GDP that would be affected would be the consumption expenditure. ii. FlyCheap Airlines purchases a new jetliner from Boeing. The component of GDP that would be affected would be the investment expenditure. iii. FlyCheap Airlines purchases new seats to be installed on a jetliner it already owns. The component of GDP that would be affected would be the investment expenditure. iv. FlyCheap Airlines purchases 200 million gallons of fuel. There would be no component of GDP that would be affected in this case because purchasing fuel is an operating expense. v. A French citizen purchases a ticket to fly on a FlyCheap flight from Paris to New York.

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