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This was the price and production level combination that profits were maximized. Which means Marginal Cost and Marginal Revenue were equal. As the nature of this market, firms typically didn’t need to spend much on advertisement since there were no competitions. However, because the Neutron did not reach a wide spectrum of consumers, Quasar Computer’s executives decided to increase the advertising budget and spent more on improving production to help with getting the Neutron to reach a wider consumer base instead of passing the cost to its customers. By doing that, Quasar Computer avoided the risk of jeopardizing its consumers’ demands...
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Common topics in this essay:
- Differentiating between Market Structures
- Four market structures
- Market Structure Maximize Profits
- Market Structures
- Market Structures
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