Monopoly and Quasar

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In 2003, Quasar computers launched a revolutionary new laptop computer named the neutron. The neutron uses high speed optical conductors, which is the first technology of its kind to be used in a laptop. Over time many businesses need to evolve to stay competitive and continue to make a profit in the market place that they have entered. This paper will discuss how the Quasar computer company moved through the different market structures over the past ten years and how the pricing and non-pricing strategies affected the company’s growth. During their transition the company faced many obstacles that could have caused a detriment to their economic prosperity. We will also discuss some of the potential risks that the company may have faced and the negative consequences that they would have had to overcome in those situations. Last, we will explore the competition that Quasar faced as the transition from one market structure to another occurred and analyze the commercial policies that are intended to protect the computer industry. Quasar like most other companies found a short-term profitable product, but being able to adjust as competition enters the market is the key for Quasar to remain profitable.

After the launch of the Neutron laptop computer Quasar enjoyed a pure monopoly market. A pure monopoly exists when a single firm is the sole producer of a product for which there are no close substitutes (McConnell, & Brue, 2004). During this time the company could set the pricing of the computer based on the demand for the newly innovative product. Because no other company produced the optical notebook the company was free to charge above market value for their product. But having a product in place will not bring up the sales. One of the strategies is to select an advertising budget to attract more customers to their product. The simulation showed that by slightly cutting the price and advertising the product the company could more than double their profits....
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