Introduction to Business
Introduction to Business
OER 2018 Edition
ISBN: 9781947172548
Author: OpenStax
Publisher: OpenStax College
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Chapter 1.7, Problem 2CC

Compare and contrast perfect completion and pure monopoly. Why is it rare to find perfect competition?

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1.3 Does the principal agent/engineer have power to give instructions after practical completion? (4)
As the lead engineer in an automotive company, you need to make a criticaldecision: whether to “outsource” the design and maintenance of your powertrain or tokeep that responsibility “in-house”. While making that decision, there is uncertaintyassociated with how often the powertrains will fail: either “rare” or “often”.• If you decide to outsource the design and maintenance, you pay a fixed contractrate of $20M to an external company, which delivers the design and takes theresponsibility of the maintenance service under a warranty regardless of howoften the vehicle powertrain fails.• If you decide to keep the design and maintenance “in-house”, your company mustdecide whether to use the “existing design” with minimal changes or to invest on a“new design”.o The existing design is difficult to maintain and cheap to develop. If thefailures occur often, it will cost $25M in the long run for the design andmaintenance, and if the failures are rare, it will cost $15M. The new designwill be…
Write down the features of perfect competition?

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Introduction to Business

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