Accused of monopoly behavior

Reference no: EM1370523

You work for the company that is being accused of monopoly behavior, given its large size. Comparisons are made to the industry standard, where each establishment has on average about 15.1 employees. Your company is quite a bit bigger than that, but you want to provide evidence against these monopoly charges.

a. You've collected data at different times in your company's history, when you had different amounts of capital.
In 1990, SRATC = 1.875Q2 - 18.75Q + 116.88
In 2000, SRATC = 1.875Q2 - 56.25Q + 500
In 2010, SRATC = 1.875Q2 - 37.5Q + 237.5
Plot these three different SRATC curves (have Q go from 0 to 20), and discuss how (and why) your company has changed since 1990 in terms of its size.

b. Make another column labeled "LRATC" that includes three points: 1990's SRATC when Q = 2, 2000's SRATC when Q = 18, and 2010's SRATC when Q = 10. Plot a 2nd-degree polynomial trendline to represent your company's LRATC.

c. In a more competitive industry with smaller firms, typical LRATC curves follow LRATC = 100/18Q2 - 100/3 Q + 100. Using all available information in this question, present an argument that could be used to justify your company's size.

Reference no: EM1370523

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