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Describe the Industry and Explain the General Pattern of Change of the Particular Market Model

In: Business and Management

Submitted By sookie79
Words 423
Pages 2
Question 1

a. i

AFC = TFC = 60 = $6 Q 10

a. ii

ATC = AFC + AVC

ATC = $6 + $46.50(AVC of output 10)

ATC = $52.50

a.iii

MC = Extra cost of increasing output by one more unit. This of it cost E110 to produce 50 units of a commodity and E112 to produce 51 units, marginally 9 to 10 = $46.50 - $43.33 = $3.17

Question 3

All are explained according to a dictionary of economics and commerce by J.L. Hanson

Competition: is a term used to indicate the environment in which production and distribution are carried on

Cartelization: This explains the activities of a monopolistic type of organization of German origin established originally for the purpose of retricting output of member firms in order to keep up the price of their products.

Price leadership: Here, there are only a few producers of a commodity when all forms must change the same price, one firm generally but not always the largest takes the price change lead.

The internet would promote competition due to a range of alternatives available to prospective clients from all over the world in reasonable time and less cost of reach.

3b. An example is on arbitrage which is the buying and selling of stocks and shares, currency, bills of exchange where different factors from all over the world determine the changes on the price of the above.

Another example is that of oil products i.e. the political crises which occurred in Libya affected the output of oil resources to the world which later affected prices around the world.

Another is collusion which area of 2 types “Explicit and implicit collusion”

A secret agreement among 2 or more competition forms in an industry to dominate the market, control price through informal, independent, actions.

3c) to me, there is little or no way we can eliminate those problems because

i. It usually based on no...

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