No Pain No Gain (NPNG) is an E-Commerce service providing company operating in a highly competitive market
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Question:
No Pain No Gain (NPNG) is an E-Commerce service providing company operating in a highly competitive market with the following cost structure: Total Cost = 100,000 + Q, where Q is a unit of service (quantity) and all of the fixed cost is a sunk cost.
a. Describe the characteristics of NPNG’s cost structure. Explain how the market NPNG is operating will change over time? Justify why?- b. What are the total average and marginal costs of NPNG and describe the relationship between total average and marginal costs of NPNG? How does it affect the profitability of NPNG operating in a highly competitive market?
c. What would be the lowest possible market price in the short run? Explain why?
d. To reduce the cost, NPNG provides online service only, using AI (artificial intelligence) powered chatbot, resulting in no substantial marginal cost. But this chatbot technology can be easily copied, unfortunately. Evaluate how this will change the market in the short run and in the long run.
e. What would be the survival strategies for NPNC?
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