Macroeconomic Analysis-Expenditure Model
Macroeconomic Analysis-Expenditure Model
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Purpose:
To assess your ability to evaluate a company’s data to determine its profit maximization point.
Overview:
The Excel-based assignments examine the use of data in business decision making. In this assignment you are asked to determine the profit maximization point in two scenarios:
1) Perfect competition; and
2) Less-than-perfect competition.
Action Items:
- Your instructor will provide values for the following:
Unit price in perfect competition
Equation for total cost under perfect competition
Equation for unit price under less-than-perfect competition
2.Calculate Marginal Revenue and Marginal Cost and determine the profit maximizing output for a firm under the two scenarios.
- Examine the two charts that will appear on the Excel spreadsheet after you input the data.
- Write a 1-page business brief addressing the following: describing the differences between the scenarios. Include answers for the following questions:
- Describe the differences between the scenarios.
- Explain the source of the difference between the two scenarios.
Comment on the impact on the market and economic agents when the competition is changed from perfect to less-than-perfect competition.
