Outline a plan that will assess the effectiveness of the market structure for the company’s operations. Economic homework help

Assignment 2: Operations

Due Week 6 and worth 300 points

Using the regression results and the other
computations from Assignment 1, determine the market structure in which the
low-calorie frozen, microwavable food company operates.

Use the Internet to research two (2) of the
leading competitors in the low-calorie frozen, microwavable food industry, and
take note of their pricing strategies, profitability, and their relationships
within the industry (worldwide).

Write a six to eight (6-8) page paper in
which you:

  1. Outline a plan that will assess the
    effectiveness of the market structure for the company’s operations.
    Note: In Assignment 1, the assumption was that the market
    structure [or selling environment] was perfectly competitive and that the
    equilibrium price was to be determined by setting QD equal to QS. You are now
    aware of recent changes in the selling environment that suggest an imperfectly
    competitive market where your firm now has substantial market power in setting
    its own “optimal” price.
  2. Given that business operations have changed
    from the market structure specified in the original scenario in Assignment 1,
    determine two (2) likely factors that might have caused the change. Predict the
    primary manner in which this change would likely impact business operations in
    the new market environment.
  3. Analyze the major short run and long cost
    functions for the low-calorie, frozen microwaveable food company given the cost
    functions below. Suggest substantive ways in which the low-calorie food company
    may use this information in order to make decisions in both the short-run and
    the long-run.

TC = 160,000,000 + 100Q +

VC = 100Q + 0.0063212Q2
100 + 0.0126424Q

  1. Determine the possible circumstances under
    which the company should discontinue operations. Suggest key actions that
    management should take in order to confront these circumstances. Provide a
    rationale for your response. (Hint: Your firm’s price must cover average
    variable costs in the short run and average total costs in the long run to
    continue operations.)
  2. Suggest one (1) pricing policy that will
    enable your low-calorie, frozen microwavable food company to maximize profits.
    Provide a rationale for your suggestion.


  • In Assignment 1, you determined your
    firm’s market demand equation. Now you need to find the inverse demand equation.
    Having found that, find the Total Revenue function for your firm (TR is P x Q).
    From your firm’s Total Revenue function, then find your Marginal Revenue (MR)
  • Use the profit maximization rule MR = MC
    to determine your optimal price and optimal output level now that you have
    market power. Compare these values with the values you generated in Assignment
    1. Determine whether your price higher is or lower.)
  1. Outline a plan, based on the information
    provided in the scenario, which the company could use in order to evaluate its
    financial performance. Consider all the key drivers of performance, such as
    company profit or loss for both the short term and long term, and the
    fundamental manner in which each factor influences managerial


  • Calculate profit in the short run by
    using the price and output levels you generated in part 5. Optional: You may
    want to compare this to what profit would have been in Assignment 1 using the
    cost function provided here.
  • Calculate profit in the long run by
    using the output level you generated in part 5 and cost data in part 3 and
    assuming that the selling environment will likely be very competitive. Determine
    why this would be a valid assumption.)
  1. Recommend two (2) actions that the company
    could take in order to improve its profitability and deliver more value to its
    stakeholders. Outline, in brief, a plan to implement your
  2. Use at least five (5) quality academic
    resources in this assignment. Note: Wikipedia does not qualify
    as an academic resource.

Your assignment must follow these formatting

  • Be typed, double spaced, using Times New
    Roman font (size 12), with one-inch margins on all sides; citations and
    references must follow APA or school-specific format. Check with your professor
    for any additional instructions.
  • Include a cover page containing the title of
    the assignment, the student’s name, the professor’s name, the course title, and
    the date. The cover page and the reference page are not included in the required
    assignment page length.

The specific course learning outcomes
associated with this assignment are:

  • Analyze short-run and long-run production
    and cost functions.
  • Apply macroeconomic concepts to changes in
    global and national economies and how they affect economic growth, inflation,
    interest rates, and wage rates.
  • Evaluate the profit-maximizing price and
    output level for given operating costs for monopolies and firms in competitive
  • Use technology and information resources to
    research issues in managerial economics and globalization.
  • Write clearly and concisely about managerial
    economics and globalization using proper writing mechanics.

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