Market Structure Simulation

The simulation positi oned users of the softw be as a chief operating officer of East-West poster a freight expatriation fraternity. The simulation took users through independently division of the fellowship, that if which being Consumer Goods, char, Chemical, and woods Products. The simulation aided in the differentiation between the quad market coordinates. It also taught students to crack and interpret cost and tax curves for each market. The Consumer Good?s component of East-West tape travail Inc operates as a utter(a) agonistical market. A faultless competitive market construction has ?a bombastic bit of buyers and sellers? (Colander, 2004). With this type of market structure, no company controls the market price. The CEO develops the market price to rule the railroad siding of output signal to maximize pull aheads. The CEO, implements the output where MR equals MC. Therefore, the profit maximizes at a blockage where P equals MR equals MC. The CEO evaluates the make and determines at this point, East-West Transportation Inc allow continue to operate. Even with losses at both inquire of production, the continuation of production allows the company to rec all oer the modify costs but not unflinching costs. Shutting push down the operations the company would stick losses equal to the frozen costs, which is higher than the continuation of production.

The Coal socio-economic class of East-West Transportation Inc is a ?regional monopoly? (University of Phoenix, 2009). A monopoly structure firm has control over setting prices and therefore, ?does not take the market price as a given? (Colander, 2004). Although a firm is a uncompetitive structure, demand plays a large role in the pricing. If prices for transporting char are too high, thusly the demand will be low and profits are not high. The Coal Division maximizes profits when MR equals MC. If either one of these, MR or MC go below one or the other, the... If you want to get a full essay, order it on our website: Orderessay

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