Description
Purpose of Assignment
Students will develop cost curves on which firm behavior is based and will utilize these cost curves to determine the behavior of their chosen organization in the market served. Using the concept of comparative advantage, students analyze trade opportunities and use the model of supply and demand to explain factors that could affect demand, supply and prices. Students will determine various factors that could affect their organization's total revenue and will recommend actions the firm could use to maximize their profit and their presence in the market served.
Assignment Steps
Scenario: You have been given the responsibility of working with your organization's CEO to do a competitive market analysis of the potential success of one of their existing products.
Research an organization and a product produced by that organization in which an analysis can be conducted.
Write a 1,750-word analysis of the current market conditions facing your product, making sure you address the following topics:
- Define the type of market in which your selected product will compete, along with an analysis of competitors and customers.
- Analyze any comparative advantages and international trade opportunities.
- Explain the factors that will affect demand, supply, and prices of that product.
- Examine factors that will affect Total Revenue, including but not limited to:
- Price elasticity of demand
- Factors that influence productivity
- Various measures of costs, including opportunity costs
- Externalities and government public policy and their effect on marginal revenue and marginal cost
- Recommend how your organization can maximize their profit-making potential and increase their presence within the market served by the product.
Cite a minimum of three peer-reviewed sources from the University Library.
Format your paper consistent with APA guidelines.
Explanation & Answer
Good luck in your study and if you need any further help in your assignments, please let me know.Goodbye.
Running head: CURRENT MARKET CONDITIONS
Current Market Conditions
Name
Institution
Date
1
CURRENT MARKET CONDITIONS
2
Market Description
The organization’s product is operated under perfect competition type of market
structure. Such market has some distinct and salient characteristics. There are many buyers and
sellers in the market and this indicates that no single player who has a significant impact on the
market, as the buyer or seller is too small compared to the market (Makowski, 2011). For
instance, when they change the price of goods and service, the impact will not be felt by the
consumers. Product sold is homogenous and this denies the buyers the preference for the product
of any producer. Buyers will not be able to differentiate goods and services provided in the
market (Rosen, 2014).
In this type of market structure, there is perfect mobility of factors of production such as
producers can respond to price signals and are free to enter or leave the market. In addition,
buyers and seller have perfect information about the market (Rosen, 2014). The consumer knows
the prices to pay for the product given by the equilibrium point and also producer knows the
output level to produce. This is because this market operates at the equilibrium.
In this market, both consumers and producers are rational and they aim at maximizing
utility and profits respectively (Makowski, 2011). The producer will be willing to maximize his
profits where marginal cost equals marginal revenue while the consumer will prefer the highest
point of his indifference curve where his utility is high.
The organization majored in agricultural market and it chose to produce tea as it had
some attached advantages like favorable climatic conditions, huge profits, and wide market.
The choice of tea as the product to engage in a global market is facilitated by its
comparative advantages. It can be produced and be processed using the readily available
CURRENT MARKET CONDITIONS
3
resources at low process cost as compared to other producers (Gold, 2013). The production of tea
at lower cost due to availability of natural resources is an added attribute to the existing
comparative advantages. The organization will also promote international trade through the sale
of tea in a global market. The possibility of thi...
