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Essay Will Bury Scenario

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Abstract

This paper will explore several economic concepts, and its benefits within the capitalistic market system. The main objectives are: how to increase revenue, how to achieve ideal production levels, how to determine fixed variable costs to maximize profits, and how to identify methods to reduce costs. The sole proprietor will operate in a pure monopoly market structure, which is characterized by his unique patented technology. Therefore, as a price-maker controlling the market, with apparent economies of scale, he must quickly identify the production level that gives the greatest vertical distance between the total revenue and total cost curves. More to the point, the company’s quantity of output that equates marginal revenue and …show more content…

His new technology will transform the audio by creating a digital book file, thus enhancing the quality of sound, and rivaling the competitions inhuman sound. Furthermore, Will has worked on this invention for several years in his garage while maintaining a lucrative, technical career at High Tech Digital. The invention process has allowed him to develop and patent the product, thereby hoping to transform consumer access to a quality digital reader. In addition, Will realizes that the intellectual property rights guarantees him a return on his investment, and his dollars spent now, will pay off later. However, operating in a pure monopoly market structure as the price maker, poses critical pros and cons that must be addressed. A pure monopoly, by definition is “one firm or sole seller of a product or service with a unique product, where product differentiation is not an issue, according to McConnell, Brue, & Flynn, 2009, Ch. 9, p. 177.” Thus, the barrier to entry due to Will’s proprietary technology is a positive attribute. However, in a pure monopoly setting, Will must ensure his customer’s that his pricing is fair, due to having the price maker status. The demand curve, which is the determining factor of his long term profitability, is also a key factor for Will to consider. Finally worth mentioning, Will’s technical abilities are an asset, but he must improve his business acumen if he is to avoid the common pitfalls, and challenges of bringing a

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