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Microwavable Food Case Study

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1. Outline a plan that will assess the effectiveness of the market structure for the company’s operations. Note: In Assignment 1, the assumption was that the market structure for selling environment was perfectly competitive and that the equilibrium price was to be determined by setting QD equal to QS. You are now aware of recent changes in the selling environment that suggest an imperfectly competitive market where your firm now has substantial market power in setting its own “optimal” price.
Within the past of the years, society has seen an increase in the consumption and production of low calorie microwavable frozen food. Microwavable food is an easy option for working individuals, and for those who dislike to cook. The global market for microwavable foods is projected to reach US$136.6 billion by 2022, driven by busy lifestyles, increasing the number of workingwomen, changing food habits in developing markets and product packing innovations (Analysts, I. G, 2018). There are several low calories frozen microwavable food brands that compete against each other …show more content…

In relation to short term run, the price is greater than marginal cost, thus it may not generate profit in the short run. In relation to long run analysis, marginal revenue always equals to marginal cost. In order to become profitable, the price needs to be greater than the average total price cost (Mankiw, 2011). For the company’s price, in the short run, must meet average variable costs and average total cost needs to be met in the long run in order to continue operations.
4. Determine the possible circumstances under which the company should discontinue operations. Suggest key actions that management should take in order to confront these circumstances. Provide a rationale for your

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