University:
Yeshiva University
Course:
1501 | Public Finance
Academic year:

2020
Views:

351

Pages:

1
Author:

chin5tgu

1. 2. 3. Select a product. It can be real or made up. Give your good or service a name and a price in U.S. dollars. Identify the market type for your product (pure/perfect competition, monopolistic competition, oligopoly, monopoly). My product is the MEGATRON Sneaker and it is selling for $310.00 U.S. dollars at all major realtors and online. The market type for my product is a perfect competition because it provides an equal level for all firms involved in the industry as there are many sellers and products are identical from one another. Draw a marginal analysis graph. Title it the market for the product you chose. Label the axes, the marginal cost curve (MC), the marginal revenue curve (MR), and the profit-maximizing quantity (Qpm). You do not need to use real numbers. Answer the reflection questions in complete sentences: ○ What is your product and its price? What type of market does your product exist in? MEGATRON Sneaker: $310.00 the product exists in a perfect competition market. ○ Why is the marginal cost curve the same basic shape, no matter the product? The marginal cost curve the same basic shape, no matter the product because the prices of a products tend to maintain the same range. ○ At the profit-maximizing quantity, is the price of your product equal to, higher than, or lower than marginal cost? Explain. At the profit-maximizing quantity, the price of my product is equal to its marginal cost because if price were above marginal cost, the firm could increase profits by increasing output, while if price were below marginal cost, the firm could increase profits by decreasing output. ○ Assume Qpm is 100 units. What is your total revenue? The total revene would be $31,000. ○ Why would an already-successful business owner conduct a marginal cost analysis for their product? The owner would conduct a marginal cost analysis for their product to decide if they would be able to increase product price beyond the marginal cost, to be able to produce more overall revenue.\