Astro Computers makes onboard vehicle control computers for the Tesla. The production department has gathered data on the costs of several yearly production levels and asked you to help interpret these for them. 1. The data for Astro appear in the graph below. The COO asks what production level he should set for the coming year, if Astro operates in a perfectly competitive market. (the graph is in the picture) 2. Is Astro earning “excess profit” (explain what that means if you think they are) and how other firms will react when they see Astro’s performance?
Astro Computers makes onboard vehicle control computers for the Tesla. The production department has gathered data on the costs of several yearly production levels and asked you to help interpret these for them.
1. The data for Astro appear in the graph below. The COO asks what production level he should set for the coming year, if Astro operates in a
2. Is Astro earning “excess profit” (explain what that means if you think they are) and how other firms will react when they see Astro’s performance?
3. The production department has also done a bit of research on other firms operating in the market for onboard control computers. The graph below shows the relative sizes and cost structures of the four largest firms in the market (Data, Astro, Consolidated and BCS); these four firms combined account for 35% of business in the market for onboard control computers. There are over fifteen firms that supply onboard control computers to Tesla and other auto makers. They are standard and uncomplicated to build.
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