Applications of Cost Theory
Answer the following discussions based on the Katrinaâ€™s Candies scenario
From the scenario for Katrinaâ€™s Candies, determine the appropriate type of market structure for the situation in question. Cite at least four (4) defining characteristics that have helped you reach this decision regarding the appropriateness of the chosen structure.
Recommend two (2) kinds of pricing and output strategies that Katrinaâ€™s Candies should use to reach the goal of profit maximization. Suggest key modifications that Katrinaâ€™s Candies should make in order to maintain a competitive advantage when new entrants enter the market. Provide a rationale for your suggestions
Imagine that you are a manager of a chemical company. An accident has occurred in which chemicals leaked into the ground water nearby. The community is unaware of the accident. Compare the primary costs involved in cleaning up the water immediately (and thus confessing) versus hiding your culpability now and possibly paying more in the future. Predict the impact on profitability in both situations. Justify your response.