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Macroeconomic Analysis-Expenditure Model

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To assess your ability to evaluate a company’s data to determine its profit  maximization point.


The Excel-based assignments examine the use of data in business decision making. In this assignment you are asked to determine the profit maximization point in two scenarios:

1) Perfect competition; and

2) Less-than-perfect competition.

Action Items:

  1.       Your instructor will provide values for the following:
  • Unit price in perfect competition
  • Equation for total cost under perfect competition
  • Equation for unit price under less-than-perfect competition
  1. Calculate Marginal Revenue and Marginal Cost and determine the profit maximizing output for a firm under the two scenarios.
  2. Examine the two charts that will appear on the Excel spreadsheet after you input the data.
  3.        Write a 1-page business brief addressing the following: describing the differences between the scenarios. Include answers for the following questions:
  • Describe the differences between the scenarios.
  • Explain the source of the difference between the two scenarios.

Comment on the impact on the market and economic agents when the competition is changed from perfect to less-than-perfect competition.

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