TOPIC:
Choose a firm that has a major presence in Australia. Define the market and identify the key competitors (if any). Analyse the
output market characteristics of this firm (e.g. perfect competition, monopoly, oligopoly etc.). If possible, justify your answer
using real-time market data (e.g. market share, profits, sales etc.) for this industry in recent years. Explain the profit maximising
condition of this firm.
Next, assume at least TWO changes in the market conditions (e.g. changes in cost of production, new entry or exit of firms in the
industry, changes in government policy etc.). How each of these changes will affect your firm’s position in the market, both in the
short and long runs? Do these changes affect the profit maximising level of output and price in the short and long runs (analyse
each change separately)? Comment on the efficiency levels of this firm and the industry overall.
Make sure to provide a rationale and justification for any of the assertions you make. You are expected to draw
upon the theoretical concepts contained in the course in your discussion of such aspects as market structure,
entry and exit, and rivalry between competitors. Use proper diagrams to illustrate your answer.
SUBMISSION FORMAT:
Your task is to write a short research paper on the above topic. Word limit: 1500 (including references).
This is a research project. I expect it to take the appearance of an academic paper and be structured as follows:
– Introduction
Mention the main objectives of this research and the reasons you choose this firm. You may cite any
relevant literature to explain the importance of your research.
– Basic analysis of the firm characteristics
What kind of firm is this – perfect competition, monopoly, oligopoly etc.? If possible, justify your answer using
real-time market data (e.g. market share, profits, sales etc.) for this industry in recent years. Explain the profit
maximising condition of this firm. How do the competitors influence the pricing decision of this firm?
Comment on the overall industry.
– Two changes in market conditions
What happens when the market conditions change? Analyse each case separately. You can use diagrams,
charts, tables to explain your findings.
– Conclusions (may be in one short paragraph)
Summarise your findings and future policy implications for this firm and the industry overall. Is there any
role of the government?
– References
Do not forget to refer to the data sources and any other references you have used to write this short
paper.
You will be graded based on your writing and communication abilities to a broader audience. The assignment must be
clearly written; any diagrams, charts, tables etc. must be clearly labelled and explained in your text and any equations
defined and explained. The quality of your argument, the clarity with which you explain and illustrate the relevant
concepts and the way in which you relate theory to the available empirical evidence is very important here. Detailed
feedback will be provided upon grading.
