Current Market Condition

2171 WordsSep 15, 20139 Pages
Current Market Conditions Competitive The purpose of this analysis is for the strategic planning group to consider developing a new proposed product. Our sponsor, the marketing director, has asked our strategic planning team to perform a competitive market analysis to determine the product’s potential success. The analysis will focus on our primary competitor in the product’s market. The reason for this current market conditions competitive analysis is to assist Levi Strauss & Co. in their consideration of developing a new proposed product. Levi Strauss & Co. marketing director has recommended our strategic planning team to execute a competitive market analysis to verify the products potential success. Factors affecting…show more content…
* The terms long run and short run do not necessarily refer to specific periods of time, but to the flexibility the firm has in changing the level of output * Workers are an example of variable costs (VC) which are costs that change as output changes * The variable and total cost curves have the same shape * Increasing output increases VC and TC * The marginal cost, average variable cost, and average total cost curves are U-shaped * The U-shape of ATC and AVC curves is due to: * When output is increased in the short run, it can only be done by increasing the variable input * The law of diminishing productivity causes marginal and average productivities to fall * As average and marginal productivities fall, average and marginal costs rise * The marginal cost curve goes through the minimum points of the ATC and AVC curves * Law of diminishing marginal productivity states as more of a variable input is added to an existing fixed input, after some point the additional output from the additional input will fall. * “As more and more of a variable input is added (i.e., labor) to an existing fixed input, eventually the additional output one gets from that additional input is going to fall.” * Average variable costs (AVC) equals variable cost divided by quantity produced, AVC = VC/Q If marginal productivity is rising, marginal costs are
Open Document