You have learned about the market structures of pure competition, monopoly, monopolistic competition, and oligopoly. In this assignment, you will apply this learning to create cost and revenue graphs for a business operating in one of these market structures. Hypothetical information should reflect characteristics of the market structure selected.
(SITUATION) -You are the manager of a firm producing a product in a specific market structure. Provide the following information:
Market of choice- PURE MONOPOLY
Describe your product and the specific cost components of your product. Make the distinction between the fixed and variable costs associated in the production of your product.
Provide reasons why your firm meets the characteristics of a particular market structure. Explain how this impacts your ability to set price. Does your firm face a downward sloping demand curve? What price do you charge for your product and why?
In a table using hypothetical data, please provide total fixed cost, average fixed cost, total variable cost, average variable cost, total cost, average total cost, and marginal cost schedules.
In a second table, indicate your profit maximizing output using price, marginal revenue, and marginal cost schedules. What profit/loss does your firm earn/incur?