Recently, the spot market price of U. S. hot rolled steel plummeted to $400 per ton. Just one year ago, this same ton of steel cost $700. According to Metals Monitor, the drop in price was due to falling oil prices, along with a rise in cheap imports and excess capacity. These dramatic market changes have greatly impacted the supply of raw steel.

Part 1: How much raw steel does a representative firm produce when the market price is $700?

30Q = 700

Q = 23.33

Part 2: How much raw steel does a representative firm produce when the market price is $400?

30Q = 400

Q = 13.33

Explanation:

One year ago:

Qs = 600 + 4P  ; Qd = 9000 - 8P

600 + 4P = 9000 - 8P

Price one year ago: $ 700   'Quantity one year ago: 3400

Current market:    Qs = 4200 + 4P    ;Qd = 9000 - 8P

4200 + 4P = 9000 - 8P

Price for current market: $ 400

Quantity for current market: 5800

C(Q) = 1,200 + 15Q2

A representative firm in a competitive market would produce steel where MC = P

MC = dC/dQ = 30Q

How much raw steel does a representative firm produce when the market price is $700?

30Q = 700

Q = 23.33

How much raw steel does a representative firm produce when the market price is $400?

30Q = 400

Q = 13.33

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

answer; communication channel;