Does a monopolistic competitor produce too much or too little output compared tothe most efficient level? What practical considerations make it difficult forpolicymakers to solve this problem?
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- ROLE OF CONTROLLER: Juanita Veracruz, newly hired controller of Braxton Industries, had been lured away from a competitor to revitalize the controller’s department. Her first day on the job proved to be an eye-opener. One of her first interviews was with Adrian Belton, production supervisor in the Cleveland factory. Belton commented, “I really don’t want to talk to anyone from the controller’s office. The only time we see those accountants is when our costs go over their budget. They wave what they call a ‘performance report,’ but it’s actually just a bunch of numbers they make up. It has nothing to do with what happens on the shop floor. Besides, my men can’t afford the time to fill out all the paperwork those accountants want, so I just plug in some numbers and send it back. Now, if you’ll let me get back to important matters.…” Veracruz left quickly, but she was already planning for her next visit with Belton. 1. Identify some of the problems in the relationship between the controller’s department and the production departments (assuming that the Cleveland factory is representative of the production departments). 2. What should Juanita Veracruz do next?
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