2. How is your market
structured? Is there
only one firm or many
firms in your market?
This week, have a clear
understanding of your
market structure so
that you can make the
correct decisions
regarding price and
production.
3. Congratulations powerful
Pisces! You are the exception
to the rule that all firms
within a market have zero
market power & must accept
the determined market price.
Your firm managed to
influence the market price of
your goods giving you the
success of ‘market power’!
This week, continue to
control your supply and
demand of your goods to
maintain your market power!
4. Feeling competitive? Many
firms are producing more
or less the same product as
you and as a result, your
competitive streak has
been released! Your strong
connection with your
customers has certainly
increased the level of
competition in your
market. Keep up your
charm of sharing customer
service and after sales
service to increase the
competition even more!
5. Warning Warning!
Watch out for evil
substitutes heading
your way this week
Taurus! Be wary of
those substitutes who
will try to increase the
competition. The more
of them you
encounter, the more
competition you will
face!
6. Being in a competitive
market has forced you
to become a price
taker. Unless you can
achieve market
power, I’m sorry to say
that you have no other
choice here. You simply
must accept the price
that your market
determines.
7. How’s life in the perfectly
competitive market
Cancer? Realise that it is
normal for firms to come
and go into the market in
a perfectly competitive
market. The amount of
firms entering and
exiting the market
means that buyers and
sellers will have a great
deal of information!
8. Your goal this week Leo is
to maximise your profit!
Remember that you are a
rational person capable of
thinking outside the
margin so make the
decision that will give you
as large as possible profit.
This week keep an eye on
your marginal costs and
marginal revenue. You will
succeed in maximising your
profit this week if your
Marginal
Revenue=Marginal Cost!
9. Two words concerning your
revenue have been confusing
you this past week: Average and
Marginal. Take the time this
week to distinguish between the
two of them. Average Revenue is
the amount of revenue your firm
will get for every unit it sells.
Marginal Revenue is the extra
revenue your firm gets as a
result of one additional unit of
your good or service being sold.
Since you’re in a competitive
market, your MR=price of your
good. Don’t let average and
marginal confuse you this week!
10. This has been a tough week for
you Libra. You are in a dilemma
whether to temporarily shut
down your firm. If you know the
market conditions are tough,
why not hold off from producing
anything for now? That is easier
said than done as you will have
to still pay your fixed costs as
well as saying goodbye to all the
revenue you gained from selling
your good. The stars say you
should shut down if the price of
the goods is less than the
average variable cost. It’s your
decision.
11. Another week of decision
making for Leo. There’s one
word you can’t stop thinking
of…EXIT! Should you
permanently exit your firm
from the market now? Your
gut instinct knows that you’ll
benefit if you exit now as
you’ll save the variable and
fixed costs but your heart can
picture all that revenue from
the goods you’ve sold slip
away. Check if your revenue is
less than your total costs and
if so, EXIT!
12. It’s time to stop moaning
Capricorn and realise that
there is nothing you can do
about that sunk cost. Just
face it, the sunk cost was
an opportunity cost that
you will never get back!
The money has been spent,
there’s no turning back.
Whatever you decide to do
this week, just ignore the
sunk cost. The sunk cost
will not interfere in your
future so therefore simply
ignore it.
13. You’re ready to set-up & get
going with your firm but hold
your breath Sagittarius! Are
you going to just simply enter
this market? What is the point
of entering the market if you
know you are going to make
no profit? Double-check this
week to reassure that the
price of your good is more
than the Average Total Cost
of Production. If this is the
case then welcome to the
world of the competitive
market!
