Market Structure simulation

East-West Transportation is in the freight transportation industry. The main mode of transportation for East-West is by road and railroad. East-West?s railroad subdivision has over 25,000 route miles across numerous states and also lasts in 3 Canadian provinces. There are 4 major transportation divisions for East-West, they consist of Consumer Goods, Chemicals, burn, and Forest products. Recently each of the divisions, which operate in different securities industry structures, have experienced just about losses and others have experienced take ins within the corresponding period of time.

The Consumer Goods division operates within a Perfect competitor market structure. The division has recently experienced some losses in profit. The issue is that there are far overly many competitors offering the same service, and there is no direct over prices. A decision had to be made in rules of order to cut down the amount of profits being at sea; the plant would either shut down or come up to operate. The decision was made to continue operations but reduce the output to 6.75 million units. By reducing the output, it reduces the amount of profit lost to $150 million. Operating in a market where there are too many competitors offering the same service, produces an environs of over supply. The surplus is very limited to a corporation in general and even more so when the company?s profits are in jeopardy.

The Coal division of East-West operates in a monopolistic environment. East-West must fix on a price and output that will maximize profits. One would think that in a monopolistic environment that any price can be set, on the contrary, when prices are set too high the company may effort the risk of incurring a huge loss. In a monopoly the demand curve is downward sloping so the company must operate at an output where the marginal taxation equals marginal cost. East-West...

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