The Production Function.

Production Function.
K L Q MP AP P TR
2 0 0 0 $130 $0
2 1 100 100 100 $130 $13,000
2 2 250 150 125 $130 $32,500
2 3 450 200 150 $130 $58,500
2 4 600 150 150 $130 $78,000
2 5 700 100 140 $130 $91,000
2 6 715 15 119.167 $130 $92,950
2 7 650 -50 92.8571 $130 $84,500
2 8 400 -250 50 $130 $52,000
2 9 100 -300 11.1111 $130 $13,000
2 10 30 -70 3 $130 $3,900

Can your firm benefits of the Economics of scale?

Considering the actuality of our company and its passing in the industry,
we can take a variety of the types of these economies. Primarily we must
ask ourselves the question, what are we looking for? As any company,
we are looking to grow in the market, and considering that there are no
large companies in our industry, making the right decisions will be of
great importance, since with this we could become a Monopolist
company.

So, studying these economies and with the intention of being a big player
in the industry, these would be the measures we would take: }

Cost Advantage: offer a lower market price than the competitors, this is basically
because to win customers you have to have a variant, since our market is limited in
technology, finding a way to enter the market by lowering prices will be a good
way.

Barrier to Entry: through this type of economy, we seek to manage the market,
that is, hand in hand with the previous point, creating a price that competitors
cannot manage, of course this involves lowering production prices, and it is
possible taking into account other companies.

Network Effects: together with the previous points we should be achieving a value
to the product people will start to buy our product more often, so that little by little
our company will start to dominate our market.

Brand Recognition: As a small company we will be more established and expand

our operations, we can invest in building brand recognition and reputation.
 The Cost Structure.
VC AVC FC AFC TC MC AC Total
Profit
$0 $5,085 0 $5,085 0 -$5,085
$8,300 83 $5,085 50.85 $13,385 83 133.85 -$385
$20,750 83 $5,085 20.34 $25,835 83 103.34 $6,665
$37,750 83 $5,085 11.30 $42,435 83 94.3 $16,065
$49,800 83 $5,085 8.48 $54,885 83 91.475 $23,115
$58,100 83 $5,085 7.26 $63,185 83 90.2642 $27,815
$59,345 83 $5,085 7.11 $64,430 83 90.1118 $28,520
$53,950 83 $5,085 7.82 $59,035 83 90.8230 $25,465
$33,200 83 $5,085 12.71 $38,285 83 95.7125 $13,715
$16,600 83 $5,085 25.43 $21,685 83 108.425 $4,315
$1,660 83 $5,085 254.25 $6,745 83 337.25 -$4,315

Here is a graph with what we have just seen.

Opportunity cost:
To arrive at a conclusion, it is imperative to consider several factors such as market demand,
competition, growth potential, cost efficiency, and consumer perception. These variables will
aid in determining the answer to the question at hand, which may very well be affirmative.
However, it is important to elaborate on why this is so. As a company with minimal
competition in the market, we enjoy easy access to entry and exit barriers, thereby providing
us with ample opportunities for growth and expansion. This, in turn, would enable us to offer
lower prices, leading to higher profits and the potential to become a major player in the
industry.