Select a new, realistic good or service for an existing industry. Write the econ

Question

Select a new, realistic good or service for an existing industry.

Write the economic analysis section of a business proposal.

MUST HAVE: statements about the market structure and the elasticity of demand for the good or service/ create hypothetical data, based on similar real world products to estimate fixed and variable costs.

Required Elements: Identify market structure Identify elasticity of the product Include rationale for the following questions: How will pricing relate to elasticity of your product? How will changes in the quantity supplied as a result of your pricing decisions affect marginal cost and marginal revenue? Besides your pricing decisions, what are your suggested nonpricing strategies? What nonpricing strategies will you use to increase barriers to entry? How could changes in your business operations alter the mix of fixed and variable costs in line with your strategy? incorporate appropriate concept graphs in answer

The paper is graded based on the following key topics from the left column: Appropriately evaluated market structure and elasticity for the product Created a pricing strategy based on market factors Created non-price barriers to entry based on market factors Demonstrated an understanding of the uses of product differentiation Demonstrated an understanding of economic cost concepts.

**** ONly detailed answers that answer ALL the questions/points w/graphs will be awarded the points. I will be asking the same question in different subjects so if you answer correctly, you might get all the points there too!

Explanation / Answer

n neoclassical economics there have been two strands of looking at what perfect competition is. The first emphasis is on the inability of any one agent to affect prices. Usually justified by the fact that any one firm or consumer is so small relative to the whole market that their presence or absence leaves the equilibrium price very nearly unaffected. This assumption of negligible impact of each agent on the equilibrium price has been formalized by Aumann (1964) by postulating a continuum of infinitesimal agents. The difference between Aumann's approach and that found in undergraduate textbooks is that in the first, agents have the power to choose their own prices but do not individually affect the market price, while in the second it is simply assumed that agents treat prices as parameters. Both approaches lead to the same result.

The second view of perfect competition conceives of it in terms of agents taking advantage of

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