Module Overview
Mostly consumers benefit from competition through greater choices and lower prices. However, not all markets are equally competitive. Consider the airline industry.
Would prices of commercial aircraft-and eventually the cost of travel-come down if six or ten international companies competed for the business instead of just two?
Perhaps. However, would it make sense for the new companies to enter the market? Probably not unless the government subsidized the effort.
Understanding the marketplace in which your business operates will help you maximize the probability of earning profit for your business. In this module, you will learn some basic principles of estimating the market and generating profit.
Module Readings
Complete the following readings early in the module:
Module overview
From your course textbook, Managerial economics: Economic tools for today's decision makers, read the following chapters:
Pricing and Output Decisions: Perfect Competition and Monopoly
Pricing and Output Decisions: Monopolistic Competition and Oligopoly
From the Argosy University online library resources, read:
Lawler, E. E., III, & Toole, E. (Eds.). America at work: Choices and challenges. Gordonsville, VA: Palgrave Macmillan.
Assignment: Current Examples of Market Structures
Instructions: In the previous assignment and the assigned readings for this module, you analyzed industries, identified their market structures, and determined how management decisions are made on the basis of the market structure.
In this assignment, you will learn to determine the industry classification of specific market structures and industries.
Tasks:
Identify an article on any one of the following management decisions commonly made in an organization:
Cutting costs
Enhancing business operations
Increasing productive capacity using technology
You can consult sources such as the Wall Street Journal, Financial Times,Bloomberg Markets, the Economist, US News and World Report, and the Argosy University online library resources.
After reading the article, respond to the following:
Identify the unifying theme in the article. Does the theme pertain to economics and the reasoning for cutting costs, enhancing business operations, or increasing productive capacity using technology? How?
Evaluate the situation that you think proposes the most significant consequences for society. What are the consequences that you foresee?
If you were the regulator of the industry analyzed in the article, how would you decide the validity of the company policy in the article and why?