Essay Will Bury Scenario
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
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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