As Sony begin production of their new product, Playstation Move, can you define the

following costs and explain the short run influences on a)total cost b)average cost and c)marginal cost. Illustrate your explanations of each cost with a diagram.

Explanation of average and marginal cost should include reference to

the influence of diminishing returns. Please use below case study to follow.

Sony has launched a 'motion controller' for its Playstation 3 to challenge the

ever-popular Nintendo Wii. The new controller is called the 'Move'. The

PlayStation 'Move' tracks the movement of a wand, while the PS3 eye camera

tracks body movements. Latest figures show that Sony has sold more than 33 million PlayStation 3s and

Microsoft has sold more than 39 million Xbox consoles. Nintendo, however are

leading the way, having sold a staggering 67.5 million Wiis. A Technology Expert forecast that the Move will be unlikely to present much of a challenge to Nintendo at least to start with.

'Nintendo has such a lead in this market that both Sony and Microsoft are

competing to be the number two choice' he said. Another gaming system to look out for later this year is Microsoft's 'Project Natal', which will work on all existing Xbox 360 consoles. The idea is to allow

users to play games controlled by body movements and speech, rather than using a handheld device. Microsoft plan to launch Project Natal in November 2010. Adapted from BBC News Website.