Market Structure – Quasar Computer

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Market Structure – Quasar Computer
ECO/GM 561
June 27, 2011
Instructor: Rodolfo Rivas

In economics, a market structure is made up of industries producing identical products. This paper will introduce solutions using strategic variables available to sustain the economic profits that Quasar computers can make. The paper will momentarily explain the different market structures and also discuss some of the pricing and non pricing strategies as well as the kind of innovations that would be proposed to sustain the organization’s uniqueness. Market structures have been grouped into four distinct types: pure monopoly, pure competition, monopolistic competition, and oligopoly (McConnell & Brue, 2005 p. 413). Accepting the diverse market structures is important to assist in comprehension in what ways prices and output are regulated. These ultimately assist to calculate the efficiency or inefficiency of those markets.

Quasar computers lunched the world’s first all-optical notebook computer in 2003 called Neutron. It is imperative that Quasar computers implement the best price strategies for the notebook with a view of maximizing its profit while enjoying a pure monopoly “market structure in which one firm is the sole seller of a product or service” (McConnell & Brue, 2005 p. 413). From observing the impact of price on demand, revenues, and profit through the pricing tool in the simulation, the price strategy to implement would be to set the price at the point where the marginal cost equals to the marginal revenue. Setting the price at $2550 per notebook will create a position for the marginal cost to be equals to the marginal revenue and ultimately resulting in maximum profits for Quasar Computers. The entry of Orion Technologies in 2006 into the optical notebook market with a similar product resulted into Quasar Computers in an oligopolistic market which “involves only a few sellers of a standardized or differentiated product” (McConnell & Brue, 2005 p. 414). In...
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