Final Project Assignment Example | Topics and Well Written Essays - 250 words

terminal Project - Assignment ExamplePricing is determined by the duplicate cost incurred in producing unmatchable extra unit of the commodity such that monetary value is equated to marginal cost i.e. Price=MC.Since the main objectives of these dissolutes is to maximise profit the following measures are appropriate for the respective firms.Firm 1 This firm should retain its price at 4 units and maintain its AVC at 3units so that it can maximize profit and understate loss. This is because as long as PAVC the firm will recover its cost of operation plus extra revenue which goes to profit.Firm 2 In this firm the price is 10 which equals MC at 10 and therefore qualify to be in the competitive market but since VCTR it will make losings as the firm is not even meeting the break-even point. The policy to be adopted by the firm is to reduce the variable cost and squeeze the opinionated cost which is not affected by the variations in output.Firm 3 In this firm the losses arises from em ploying many variable factor inputs which outweigh the fixed and therefore the best recommendation is a freeze in employing variable factor inputs like reduction the casual labor size.Firm 4 In this firm the price (25) is greater than AVC i.e. PAVC and this already ensures that it let the break-even point. This is responsible for its zero economic profit. For the firm to do better it either maintains its current output or reduce price.In a monopoly market, the firm tends to be the sole seller and therefore have great power to give any price through manipulating of the output (Hall, Robert & Marc, p 64). Under this market structure, for profit maximisation the MC=MR. In this respect the firms above needs the following