Your company would like a presentation of your findings on maximizing profit, pricing decisions, and strategic cooperation at the quarterly board of directors meeting.
Help with this Unit 2 project is in Chapters 12 and 13 of Managerial Economics: Foundations of Business Analysis and Strategy.
In your presentation, you will outline how managers can determine the conditions for the optimal output level. Address the following in your presentation:
Two slides: Identify and describe a competitor to the company you chose in Unit 1 (Keep in mind that the decision-making process for a monopoly applies to any firm with market power).
One slide: Explain competitive advantage.
Three slides: Compare their strategies to determine their best plan of action, including deciding upon the optimal price and output of their product or service, product differentiation, or some other strategic variable.
Three slides: Show how firms should allocate production among multiple production facilities.
Two slides: Analyze how firms in oligopolies position themselves to be successful.
Four slides: Show how firms in oligopolies can cooperate to make themselves better off than they would be in a non-cooperative Nash equilibrium.
Full Answer Section
- Strategic cooperation: Strategic cooperation occurs when two or more firms work together to achieve a common goal. This can involve joint ventures, mergers, and acquisitions. Strategic cooperation can be beneficial for firms, as it can help them to reduce costs, increase market share, and develop new products.
Here are some additional points you can include in your presentation:
- The difference between a monopoly and a competitive market: A monopoly is a market structure in which there is only one seller of a product. A competitive market is a market structure in which there are many sellers of a product.
- The importance of marginal analysis: Marginal analysis is a method of decision-making that focuses on the additional costs and benefits of each decision. This can be helpful for firms when making pricing decisions, production decisions, and investment decisions.
- The role of government in markets: Governments can play a role in markets by regulating prices, enforcing competition laws, and providing subsidies.
- The impact of technology on markets: Technology can change the structure of markets and the behavior of firms. For example, the development of the internet has led to the emergence of new markets and new ways of doing business.
In your presentation, you can also identify and describe a competitor to the company you chose in Unit 1. This competitor could be a direct competitor that sells the same product or a indirect competitor that sells a substitute product. You can discuss the strengths and weaknesses of this competitor and how it could impact your company's pricing decisions and strategic cooperation.