Monopoly and Quasar Essay Example for Free

Monopoly and quasar EssayIn 2003, quasar computers launched a revolutionary impertinent laptop computer named the neutron. The neutron use of goods and servicess high speed optical conductors, which is the first technology of its kind to be use in a laptop. Over time many businesses pick out to evolve to stay competitive and underwrite to make a profit in the merchandise place that they curb entered. This paper will wrangle how the quasi-stellar radio source computer lodge moved through the different foodstuff structures over the past decade old age and how the pricing and non-pricing strategies affected the callers growth. During their transition the company faced many obstacles that could have caused a detriment to their economic prosperity. We will also discuss some of the potential risks that the company may have faced and the negative consequences that they would have had to overcome in those situations. Last, we will explore the competition that Quasar faced as the transition from one market structure to an opposite occurred and analyze the commercial policies that be intended to protect the computer industry.Quasar like most work outer(a) companies found a short bankable product, but being able to adjust as competition enters the market is the key for Quasar to remain profitable. After the launch of the Neutron laptop computer Quasar enjoyed a unmingled monopoly market. A pure monopoly exists when a single firm is the sole producer of a product for which there argon no close substitutes (McConnell, Brue, 2004). During this time the company could set the pricing of the computer based on the demand for the impertinently innovative product.Because no other company produced the optical notebook the company was free to charge supra market value for their product. But having a product in place will not consume up the sales. One of the strategies is to select an advertising budget to attract more customers to their product. The simula tion showed that by just about deletion the price and advertising the product the company could more than double their profits. Another strategy that the company was faced with was the improvement of the production processes.By upgrading, the company do-nothing optimize production while reducing the per-unit cost. This reduction means a dishonor price for the product which could bring in more customers and a higher profit. With the expiration of the patents once held by Quasar along with the increased demand for optical computers, other companies began to enter the market. This changed the market structure into an oligopolistic market. The difficulty in the oligopolistic market is the pricing strategy.The competitors need to reach a stable price where all make a reasonable profit. Because there are competitors fighting for market share and in the case of Quasar there is only one other fighting for market share, they two need to understand that pricing is the key. If the price is too high the demand for the product is lower if the price is cut severely, then the companies would have caused a slump in the industry. Even though they are both looking to get more market share the stability of the market is what will impact to bring the profits.As market share decreased due to competition, technology is now easily available, and juvenile competitors entered the market. With low barriers to entry and ease of differentiation the market began to look like a monopolistic competition. In general, however, monopolistically competitive industries are much more competitive than they are monopolistic (McConnell, Brue, 2004). By having multiple variants in the market Quasar is faced with a decision of whether to promote the brand that has been the cornerstone of their business or introduce its deliver variant into the market.Quasar put forward invest money into research and development of their own variant that can remain competitive. By choosing to go that route, the company is able to be more profitable than if they were to advertise and promote the Neutron. As the years went by the monopolistic competition market finally became a perfect competition. A perfect competition market involves a very large number of firms producing a standardized product and allows new firms to enter or exit the industry very easily (McConnell-Brue, 2004). irrelevant the other structures, the price of the product is determined by the market. In the short term a company such as Quasar can increase profits by using cost cutting measures. In pure competition a company has very little alternative to turn a profit. The quality and pricing of the product has stabilized and the products are similar to one another. A strategy that Quasar pursued was to invest in a company called Opticom which was a primary supplier of Optical peril Screens.By investing in Opticom and continuously improving much like the company did for the Neutron line, Quasar can turn a small profit b efore the industry catches up. During the transitions, Quasar was faced with many risks that need to be addressed to keep the company profitable. By performing a risk analysis we can determine if the course of action that the company pursued was correct. For example, when the company made the choice to introduce a variant into the market to remain competitive, the risk that the company took was tremendous.The money invested in research and development of a new product may not bring the expected result. If they had a far less tops(predicate) product than the competitors or if the brand was improperly promoted, the outcome could have been disastrous. But by observing that they could use a twelve million of their unused production capacity they could lower the total cost of both the incumbent product as well as the new comer. Over the past several years the computer industry has grown exponentially with manufacturers like Dell, Apple and even Sony.Quasar has identified lacquer as the kingdom where they will face the greatest competition. Government procurement restrictions protect Japanese electronics and computer industries. These restrictions have recently been relaxed somewhat but they remain significant obstacles of trade (Unknown, 2004). These trade restrictions will clog trade of Quasars products to Japan, but the company may be able to expand into the country and take advantage of the tax breaks while possibly distributing there product under a subsidiaries name. legion(predicate) different businesses have had to evolve over their lifetime. Businesses that were once monopolies may end up on the other end of the spectrum depending on the ebb and flow of the market. The Quasar Computers scenario exhibited the evolution of a firm from one form of market structure to another. The company showed that during the life cycle of the product the company may have to straighten out through the different market structures as the product matures.The key to any comp any to remain profitable is to remain flexible. References McConnell, C, Brue, S. (2004). Economics principles. problems and policies Adobe version. University of Phoenix. (2002). Economics for Managerial Decision Making Computer Software.Retrieved from University of Phoenix, Simulation, ECOGM561 International Economics website. Unknown, . (1984). Japanese industrial policy. Retrieved from http//fraser. stlouisfed. org/publications/erp/page/5692/download/46305/5692_ERP. pdf.