Best Market Structure for a Pipeline to Function In

User Generated

qhyf1985

Economics

Description

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Competency

Understand various market structures and impacts upon firms, consumers, and government policies.

Course Scenario

Oil Company X is a large oil refinery which has been expanding and taking on new investment projects. Recently, they have considered building a pipeline that stretches across the United States, from Canada to New Orleans.

The Cost Department is looking to determine the impact of the pipeline on the current market structure, and they have asked you, a team member of the department, to submit a report on the expected changing market structure.

Instructions

As a cost analyst at your firm, you are asked to evaluate the type of market you are performing in. Assume the current number of oil companies exist in the market. After the pipeline is built, extensive trade restrictions will drastically increase Oil Company X's hold on the market.

Submit a 2-page report detailing the current market structure, and the anticipated market structure after the pipeline is built. You will also include tables to show the characteristics of each of the above market structures and where our firm conforms or does not conform to the characteristics of the different market structures. Be sure to explain the impact on price and quantity, and any pertinent changes to the firm's pricing strategy after the change in market structure.

The current market shares of each company are shown below, before the pipeline is completed and trade restrictions are implemented.

Format your report to include a title page, introduction, conclusion, and references. Include all relevant graphs, equations, and calculations. Show your work on calculations to ensure you receive partial credit for incorrect answers. No credit will be given if your work is not shown. Remember to cite your sources using correct APA format, and also use correct grammar, spelling, and formatting.

Unformatted Attachment Preview

Grading Rubric F F C B A 0 1 2 3 4 Not Submitted No Pass Competence Proficiency Mastery Introduction and/or conclusion did not summarize the Not current and future Submitted market structures. Introduction and conclusion summarized the current and future market structures. Introduction and conclusion summarized the current and future market structures, using clear supporting evidence. Introduction and conclusion summarized the current and future market structures, using clear supporting evidence and a welldefined synopsis of the report goals. Explanation of current market is Not included, but is Submitted unclear or incorrect. Explanation of current market is correct. Explanation of current market is correct, using clear examples. Explanation of current market is correct, using clear examples and welldefined reasons for proposal recommendation. Explanation of anticipated market is included, but is Not unclear or Submitted incorrect. Explanation of anticipated market is correct. Explanation of anticipated market is correct, using clear examples. Explanation of anticipated market is correct, using clear examples and welldefined reasons for proposal recommendation. Table of characteristics is Not included, but is Submitted unclear or incorrect. Table of characteristics is correct. Table of characteristics is correct, and written explanation used clear examples. Table of characteristics is correct, using clear examples and welldefined reasons for proposal recommendation. Explanation of changes to price, quantity, and Not pricing strategy are Submitted included, but are unclear or incorrect. Explanation of changes to price, quantity, and pricing strategy correct. Explanation of changes to price, quantity, and pricing strategy correct, using clear examples. Explanation of changes to price, quantity, and pricing strategy is correct, using clear examples and welldefined reasons for proposal recommendation.
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Explanation & Answer

Attached.

Market Structure for Pipeline

1

Market Structure for a Pipeline
Insert Your Name
Name of the Institution
Instructors Name
December 2018

Market Structure for Pipeline

2
Market Structure for a Pipeline

Company x is currently operating in the oligopoly market structure where there exist only a few
numbers of firms which creates a state of limited competition. This is because the oil company is
either competing partially or it is collaborating with other firms in order to maximize profit
shares from the market. In this market structure, all the companies are basically utilizing
collective market power to drive up prices and earn more profits. Company X is currently
operating on the assumption that all the firm’s in this market structure are in the business to
maxi...


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