Managerial economics Assignment Example | Topics and Well Written Essays - 500 words - 1

Managerial economics - Assignment Example 6) Firms competing in a perfect competitive market industry in most cases have little motivation for competition due to knowledge on the market dynamics (Baumol 67). As a result, their understanding of the market hampers the growth and need for incentives for developing technology. Changing consumer trends, the stature and change of traditional target markets could encourage development of research so that these trends can be monitored and dealt with effectively. For instance, young people are difficult to understand since they change their trends and preferences dynamically (Baumol  68). 1) a) MTA is monopolistic in the New York Area and it poses a great deal of control over the transport market in the New York Area. This is because despite the drop in the vehicle numbers, MTA still had the opportunity to increase the toll charges for accessing and using the roads and bridges. This strategy and move is a monopolistic move since it does not conform to the rules of demand and supply (Baumol 70). b) MTA could set small toll charges for them to maximize on profit to be realized in using the toll service. This is because this strategy would not increase the expense but it would lead to increased revenue. Increase in vehicles numbers is related to the reduced toll charges (McConnell  46). c) The best decision would be to lower the tolls fees because this would the help in increasing in the customer/vehicle numbers (McConnell  91). On the other hand, increasing the vehicle numbers would make more money through revenues to MTA. 2) a) The strategy of increasing the ticket prices could work for QuadPlex in its push to make more earnings and profit. This is because; QuadPlex theatre enjoys monopoly in the cinema business in Idaho Falls. b) The market power for QuadPlex can be measured through the number of people who visit the cinema hall and the other alternatives forms of entertainment eating on