...Week 3: Forum Question 1 Why do some workers make more money than others? Must everyone make the same wage? Explain your answers using labor market equilibrium. Your answer should be 200 to 300 words. Some workers make more money than others for various reasons, such as the type of work being preformed, the required skill-set for the work, training, experience, quality of work, etc. A workers wages are only justifiable if the value of the work they are required to do equals the wage. No one would argue that a cook at a fast-food restaurant should have the same wages as a neurosurgeon; the two jobs are entirely different and require completely different skill sets, education, training, and knowledge. Therefore, not everyone should make the same wage, even workers in the same position should not be paid the same wage, and the workers wage should be determinate upon their productivity, knowledge, and experience. The labor market is only in equilibrium when each company has purchased enough labor that is profitable at the equilibrium wage. The equilibrium wage is the wage rate that produces neither an excess supply of workers nor an excess demand for workers and labor market. A firm must determine how many workers are needed to keep the employment cost justifiable to ensure profitability of the company. Firms cannot allow wages to become a burden on the company; consequently, if the demand for the good or service that the worker is producing decreases the equilibrium is...
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...Market Structures & Amp Maximizing Pro XECO/212 Momoh Dudu 10/12/2011 What is a the number of companies rivaling in a certain market, how they differ and how they are similar, and the task they venture when entering and exiting the market determines that companies market structure. What roles does each market structure play in the economy. Many assumptions are made about the different types of markets, including competitive markets, monopolies, and oligopolies. This paper will break the wrong assumptions that there is competition in every market. It will also help to understand the following four questions. What the characteristics of each market structure consists of? How is price determined in each market structure in terms of maximizing profits? How is output determined in each market structure in terms of maximizing profits? What are the barriers to entry, if any? Competitive Markets also know as perfectly competitive market maintains two basic characteristics. The characteristics consists of having many buyers and sellers in the market and the goods and services brought forth but multiple consumers. These characteristics play a large part in devising the market price. These buyers and sellers take the market price as it is given to them. Competitive market has open doors allowing companies to enter and exit at will. Price determination is competitive markets in terms of maximizing profits are worked as total revenue minus total cost. Competition with buyers...
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...Business Proposal for Thomas Money Service Inc. Thomas Money Service Inc. has been in business since 1940 and provides a wide array of financial services for both individual consumers and large businesses. Thomas Money Service Inc. branched out in 1946 to include also a financing subsidiary called Future Growth Inc. (FGI) that specializes in equipment financing. The current global downturn, Thomas Money Service Inc. and FGI must restructure its operations and broaden its financial services for profit-maximization. This paper will identify how Thomas Money Service Inc. and its subsidiary FGI can improve its finance services for consumers and how its elasticity of demand and market structure can be analyzed to increase consumer spending. This paper will include ideas for increasing revenue, determination of the profit-maximizing quantity, how to use its marginal cost and revenue to maximize profit, non-price and pricing strategies, creation of barriers to entry, and product differentiation. How to Increase Revenue Thomas Money Service Inc. and FGI discontinued equipment financing of other brands of equipment when they began manufacture of their own equipment brand, Thomas Money Service can start cross-selling equipment financing to expand to other consumers and to give their current consumers more purchasing and finance options. This strategy will allow FGI to outpace competition by the development of new business opportunities, sales growth, increased revenue...
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...Differentiating Between Market Structures Differentiating Between Market Structures The “Differentiating between Market Structures Simulation” applied all four of the market structures to four major divisions of a fictitious transportation company called as East-West Transportation. The four divisions for the various products they transport are Consumer Goods Division, Coal Division, Chemical Division, and Forest Products Division. This paper will summarize the advantages and limitations of supply and demand, the effectiveness of structure, and will analyze how each market structure maximized their profits. The market structures represented in this paper are Perfect Competition, Monopoly, Oligopoly, and Monopolistic Competition. Perfect Competition According to the simulation the Consumer Goods Division operated in a market that perfectly competitive. There were several buyers and sellers, each of the sellers being a price taker and there were no barriers to entry. The limitations or advantages of the Consumer Goods Division are as follows. The competition is high so the demand for their service will be low. Continuing to supply this service would mean the company would have to spend more on improving the quality of its service so as to maintain and increase the demand. In the simulation, the first decision made was whether to cease operations in the Consumer Goods Division or to continue operations and minimize any losses. Monopoly The second scenario in the simulation...
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...Differentiating Between Market Structures Simulation & Characteristics Table ECO/365 October 2, 2011 Differentiating Between Market Structures Simulation The “Differentiating between Market Structures Simulation” applied all four of the market structures to four major divisions of a fictitious transportation company called as East-West Transportation. The four divisions for the various products they transport are Consumer Goods Division, Coal Division, Chemical Division, and Forest Products Division. This paper will summarize the advantages and limitations of supply and demand, the effectiveness of structure, and will analyze how each market structure maximized their profits. The market structures represented in this paper are Perfect Competition, Monopoly, Oligopoly, and Monopolistic Competition. Perfect Competition According to the simulation the Consumer Goods Division operated in a market that perfectly competitive. There were several buyers and sellers, each of the sellers being a price taker and there were no barriers to entry. The limitations or advantages of the Consumer Goods Division are as follows. The competition is high so the demand for their service will be low. Continuing to supply this service would mean the company would have to spend more on improving the quality of its service so as to maintain and increase the demand. In the simulation, the first decision made was whether to cease operations in the Consumer Goods Division or to continue operations...
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...Market Structure & Maximizing 1 Assignment: Market Structure & Maximizing University of Phoenix Xeco/212 Principles of Economics Market Structure & Maximizing 2 Market structure can be characterized as the number of firms that are competing in a particular market; along with the ways in which the companies within these markets are alike or different and the barriers to entry that exist for these given market. The level of rivalry or competition also plays a powerful role in what kind of structure emerges in a given market. This paper will focus on competitive markets, monopolies, and oligopolies by detailing the distinctions between them such as how is price and output is determined to maximize profit, analyzing their barriers to entry: and what role each market structure plays in the economy. Price control is different in each market structure and is essential to know for maximizing profits. A company ability to control the price of its goods and services is called price management. Businesses that operate in a perfect competition market structure have no control over the price of their goods and services. Companies that have the ability to control the price of the products or services are companies that have the benefit of operating under a market structure called monopoly. Organizations that run under an oligopoly enjoy the same control over price as monopolistic competition or monopoly...
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...Maximizing Profits Jay Sampson Maximizing Profits in Market Structures Paper This paper will discuss an organization that utilizes a competitive structure called Oligopoly. Characteristics of each market will be defined as well as how prices are determined in regards to how profits are maximized. Competitors of this organization will be defined and how collusive agreements are formed. Determinations will be made in regards to output barriers will be discussed. Oligopolies are also known as imperfect competitions. Concentration ratios are often determined in these markets because most markets have four firms that are counted on but in the automotive industry, there are a few more. Concentration ratios are defined as the “total output in the market supplied by the largest firms” (Mankiw, 2007). The automotive industry is considered oligopoly because it is only so many firms in the United States who manufacturer automobiles. Oligopoly is defined as a “market structure in which only a few sellers offer similar or identical products” (Mankiw, 2007 p.346). Another definition for oligopoly would be that it is a “market condition in which sellers are so few that the actions of any one of them will materially affect price and have a measurable impact on competitors” (Answers.com, 2011). The organization that has been chosen for this paper is the automotive industry. The automotive industry would be considered an oligopoly because there are only certain manufacturers...
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...Market Structures and Maximizing Profits /XECO/212 Principals of Economic In this paper I will discuss competitive markets, monopolies, and oligopolies and what role each of these plays in an economy? I will also point out: o What the characteristics of each market structure is? o How the price is determined in each market structure in terms of maximizing profits? o How output is determined in each market structure in terms of maximizing profits? o What are the barriers to entry, if any? o What role does each market structure play in the economy? First I would like to discuss what a competitive market is. This market has a large number of buyers and sellers, such that no single buyer or seller is able to influence the price or control any other aspect of the market. That is, none of the participants have significant market control. A competitive market achieves efficiency in the allocation of scarce resources if no other market failures are present (AmosWeb). Usually the competitive market does very well because demand price and supply are price equal. The demand and supply prices cannot generate any greater satisfaction by producing more of one good and less of another (AmosWeb). People want good products and they want what they pay for. I would be willing to spend hundreds on hair supplies as long as the products are good. If a product does not really provide the satisfaction you are looking for then you want to pay little or nothing for it right...
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...also must use advertising to differentiate themselves from their competitors. It is very interesting how a firm operates when considering the market structure and making market decisions to guide the firm's actions and reactions. It was interesting to learn the different markets that a firm can be part of, whether it is a perfect competition, monopolistic competition, oligopoly, or monopoly. Each market has several firms that exists within it and have defined themselves by using characteristics of such markets. As a team we had to understand the meaning of competitive firm, monopolist, and monopolistic competitive firm to maximize a business's profits. * Competitive firm - profit-maximizing condition of a competitive firm as MC = MR = P (Colander, 2010, p. 322). * Monopolist firm - A monopolist can charge the maximum price consumers are willing to pay for the quantity the monopolist produces (Colander, 2010, p. 355). * Monopolistic competitive firm - is a market structure in which there are many firms selling differentiated products and few barriers to entry (Colander, 2010, p. 361). We feel that some of our struggles in the class are still how to read and understand graphs about supply and demand curves and how we can use it in our businesses to help us become more successful. In conclusion, the economics of profits and losses can be determined in today's marketing strategy. The business has to determine, "What the firm is willing to pay for items." The...
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...Birch Paper Company Internal Environmental Analysis What they do? – Birth Paper Company is a medium sized, partly integrated paper company, producing white and kraft papers and paperboard. They also convert paperboard into corrugated boxes with printing and colour on the outside surface. Where they operate? – Birch operates 4 production divisions for paper, paperboard, and corrugated boxes as well as a timberland division to supply part of the company’s pulp requirements. How well are they doing? – The company’s profit and competitive position has improved in the last few years since decentralization of profit responsibility. Divisions appear to be doing well in their respective markets: • Southern division runs below capacity at times and has excess inventory, but market price has not noticeably weakened as a result of oversupply. • Thompson Division is in a position to bid full-cost quotations to improve the quality of their business. Key Players • James Brunner, manager of Thompson Division which produces corrugated boxes. • William Kenton, manager of Northern Division (designed specialty display box in conjunction with Thompson Division). • Manager of Southern Division (produces and could potentially supply Thompson with linerboard and corrugating medium for specialty boxes). • Commercial Vice President (analyzing the cost structures of the various divisions). External Environmental Analysis/Industry Analysis Competitors –...
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...Monopolistic competition: An evolutionary approach EXECUTIVE SUMMARY This term paper shows that a monopolistically competitive equilibrium can evolve without purposive profit maximization. Firms exit the industry if they fail to pass the survival test of making nonnegative wealth. Industry converges in probability to the monopolistically competitive equilibrium as the size of each firm becomes small relative to the market, as the entry cost becomes sufficiently small, and as time gets sufficiently large. Consequently, in the limit, the only surviving firms are those producing at the tangency of the demand curve to the average cost curve and no potential entrant can make a positive profit by entry. Introduction The criterion by which the economic system selects survivors: those who realize profits are the survivors; those who suffer losses disappear. In the late 1920s and early 1930s it became apparent that there were severe limitations in conducting economic analysis using a framework of either pure competition or pure monopoly. Consequently, economists began shifting their attention to middle ground between monopoly and perfect competition. One of the most notable achievements was Chamberlin’s, 1933 blending of elements of perfect competition and pure monopoly in a notion of ‘‘large group’’ monopolistic competition where there are many competing firms producing similar but different commodities which are not perfect substitutes. Because of the product...
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...successfully build, launch, maintain, and market individual and small business budget templates. I believe that Wipfli is in a unique position to enter and capture the market with a useful and profitable product. I further believe this will have a complimentary effect regarding other Wipfli services. How will you increase product differentiation? Budget and actual integration for: Tax preparation work papers and forms. Loan/refinancing analysis and application. Retirement planning. FAFSA and other financial preparation and reporting. Customer service / help desk. Access to professional consulting as needed. User groups, feedback surveys, and examples of successful use. Online access options. Barriers to Entry Economies of scale and qualified personnel. Difficulty and cost of product development, maintenance, and upgrades. Networking the high quality Wipfli brand through 30,000 current clients. Copywrites to the programs. Product liabilities and legal requirements. Interfacing with other Wipfil services and related discounts. Small Business Projections Small Business Projections Individual Projections Individual Projections Information Needed to Maximize Profit Product market availability and pricing. Development timeline and costs. Labor requirements and costs. Maintenance and upgrade costs. Market projections. Market structure. Elasticity of Demand and Market Structure The market has not been sufficiently penetrated. Demand...
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...Pricing Analysis Paper 1 Week 8 Pricing Analysis Paper Brian Newman Business 626 Dr. Mohammed Nadeem June 4th, 2012 Pricing Analysis Paper 2 Table of Contents Executive Summary………………………………………………………………………………………………………………..3 First Data Set……………………………………………………………………………………………………….…………………4 Second Data Set………………………………………………………………………………………………….………………….6 Future Scenarios…………………………………………………………………………………………………………………….7 Summary………………………………………………………………………………………………………………………………..8 Referances…………………………………………………………………………………………………………………………………………..9 Pricing Analysis Paper 3 Executive Summary BCN Corporation has launched the first ever to market pre-packaged performance management recognition and reinforcement system for line level organizational leaders. This innovative approach to prioritizing KPI’s and recognizing successes as well as offering a dashboard to senior leaders is expected to garner significant demand in the early stages after launch. BCN marketing and project teams have posed the following scenarios in effort of preparation for fluctuations in volume, costs, and demand. Pricing Analysis Paper 4 First Data Set When determining the maximum profit price for the first posed scenario (14,000 and 23,000 quarters 1 and 2 reduction in price 2nd quarter as loss leader to garner awareness) first we must look at the optimal profit producing quantity to produce. At peak revenue of $348,000 and peak profit of $228,000 we find ourselves at 12,000 units. At this optimal...
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...UNDERSTANDING MARKET STRUCTURES Bart Ford XECO 212 Jan. 15, 2012 Dr. Jill Trask Abstract Before someone can identify how to maximize profits in different market structures they must first understand how those markets operate and the characteristics of each. This paper will identify three market structures monopoly, oligopoly, and competitive structures and explain each in detail, as they pertain to maximizing profits, how price is determined for goods, how output of goods is determined, barriers of entry into each market, and the role that each market plays in the economy. UNDERSTANDING MARKET STRUCTURES A monopoly structured market consists of one provider for a particular good or product. A monopoly exists when one firm controls a specific resource, such as diamonds. Diamonds are very rare and scarce as a resource, subsequently if one firm were to control the vast resource of diamonds they would inevitably control the market sale of diamonds. In this way, the diamond firm would be able to set the price for diamonds at whatever they wished. Also, by doing this the firm can look into ways to cut costs related to gathering the diamonds for sale. The firm could cut back on labor costs and only use minimal amounts of labor because they can control the output during any and all stages of the production phases. Barriers of entry into the monopolistic structure are great, and include: exclusive patent rights, extremely high initial start-up costs, economic, social...
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...In an effort to serve the CVS Pharmacy’s consumer base better, the need to offer a wider variety of prescription medication selections and options system-wide. In this proposal, assumptions about the elasticity of demand and the market structure for these medications and expanded services will be included. Additionally, how the expansion will increase revenues will be explained. Further, a rationale for determining the profit-maximizing quantity will be provided. Decisions will be made by using the concepts of marginal costs and marginal revenue to maximize profit. A mix of pricing and non-pricing strategies will be suggested. This proposal will also explore options of creating or increasing barriers to entry. Further, increased product differentiation will be discussed. Finally, other way to minimize costs will be explored. Market Structure and Elasticity of Demand CVS retail pharmacies operate in a monopolistic competition market structure. According to Investopedia (2012), the monopolistic competition is, “A type of competition within an industry where: 1. Firms produce similar yet not perfectly substitutable products. 2. Firms can enter the industry if the profits are attractive. 3. Firms are profit maximizers. 4. Firms have some market power, which means none are price takers. Firms in a monopolistic competition sell goods that have either actual or perceived non-price differences. These differences are not so significant, however, that they climate the potential...
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