Economics for Managerial Decision Making: Market Structure

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Economics for Managerial Decision Making: Market Structure
Quasar Computers is a market leader for establishing their business around the Neutron notebook computer. Competition and the need to differentiate have required management to make profitable decisions to increase sales and revenue streams. The company must focus on aligning strategic variables with pricing and non-pricing options while considering how to rebrand Quasar to sustain marketability and a competitive force. Strategic Variables

Quasar established their business in 2003, to make the initiative to produce a notebook that took over worldwide and was considered a monopoly. Consumers will know Quasar’s products uniqueness and the style of the computer once introduced to the retail market. This a homogeneous market structure with multiple industries. ‘The pure monopolist produces a single unique product, so product differentiation is not an issue” (McConnell & Brue, p.177). Quasar has to determine the supply and demand for the Neutron notebooks before launched in retail stores. In table 1, Quasar will “price their computer per unit to the purchaser, revenue per unit, or average revenue, and to the seller” (McConnell & Brue p. 178). The company had to produce marginal revenue to equal marginal cost to maximize their profits. The next three years, Quasar will advance in their technology that they will have the computers patent through federal law so one else will copy their products. The strategy price for adjusted profits is also shown in table 1. Table 1 Pricing under Monopoly

Price ($) 2,550
Quantity (units) 5.3M
Total Cost ($) 12.18B
Total Revenue ($) 13.5B
Total Profit ($) 1.29B
Neutron Computers is not recognized to most consumers but the with strategy pricing of over $400 million in advertising funds they can target large markets such as major corporations or small business owners. This strategy can create a boost in demand and sales with the option of a slight price reduction...
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