Topics: Economics, European Union, Perfect competition Pages: 11 (3404 words) Published: January 19, 2014


Task 3.1-2. market structures determine the pricing and output decisions of businesses and the way in which market forces shape organisational2 How to Maximize Profit Using Total Revenue and Total Cost 2

Market structures
Market forces5
Task3.3 the business and cultural environments shape the behaviour of a selected organisation6 Task 4.1. the significance of international trade to UK business organisations7 Task 4.2.the impact of global factors on UK business organisations9 Task 4.3. the impact of policies of the European Union on UK business organisations12 Labour impact12

Economic impact13

Task 3.1-2. market structures determine the pricing and output decisions of businesses and the way in which market forces shape organisational How to Maximize Profit Using Total Revenue and Total Cost

When do a business profit allways is an importance target,so that the firm makes many decisions to achieve its main objective is profit maximization.Some decisions are critical to the survival of the firm.A firm’s output decision should be seen in both the short- run , when some factors of production are fixed and the long-run, when all factors of production can be varied. In the short-run, a firm’s average cost (SRAC) curve is U-shaped, due to diminishing returns beyond a certain output level. In the short- run, a firm will maximise its profits where MR = MC.In the long- run, a firm’s minimum achievable average costs at any level of output can be depicted by a long- run average cost (LRAC) curve. The shape of the LRAC depends on whether there are increasing, constant or decreasing returns to scale. Total profit equals total revenue minus total cost. In order to maximize total profit, the firm must maximize the difference between total revenue and total cost. The first thing to do is determine the profit-maximizing quantity. Substituting this quantity into the demand equation enables you to determine the good’s price. Alternatively, dividing total revenue by quantity enables you to determine price. Graphically, the total revenue and total cost curves appear shown in the illustration. The total revenue curve increases but at a decreasing rate — the curve becomes flatter. Eventually, total revenue begins to decrease.

Market structures

An industry consists of all firms making similar or identical products. An industry’s market structure depends on the number of firms in the industry and how they compete. Here are the four basic market structures:

Perfect competition

Perfect competition happens when numerous small firms compete against each other. Firms in a competitive industry produce the socially optimal output level at the minimum possible cost per unit. large number of small buyers and sellers

standardized product
No market power
very easy market entry and exit
Key assumptions of the perfectly competitive market:
the firm is a price taker
the firm makes the distinction between the short run and the long run the firm’s objective is to maximize its profit (or minimize loss) in the short run the firm includes its opportunity cost of operating in a particular market as part of its total cost of production Hao Hao Instant noodles is a product of Vina Company Acecook Vietnam .The product is standardized,because there are a great number of similar product in vietnam. The Output strategies : Always looking for ways to improve the quality of bread, made many products with many flavors to suit each client group.Need to retain existing customers and find new potential customers by paying more attention to the promotion policy for advertising. Packaging design is also important, Wheat perfectly possible to launch the new product line with a new eye-catching packaging or slight changes create fresh packaging for their products as a way to give customers see the difference, and always...

Kotler P and Lane Keller K (2005) Marketing Management 12e (Pearson Education, New Jersey)
-VinaCapital, ‘Investing policy’, viewed 18 November 2013,
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