Tag: competition
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Pricing under monopoly
Pricing and output policies in monopoly One seller supplying the product Monopoly can charge the price which is acceptable to the consumers It may restrict the supply to increase the demand and earn abnormal profits Monopoly does not respond to the consumers’ demands because it knows it will sell the product anyway
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Pricing under perfect competition
Pricing and output policies in perfect competition Large number of buyers and sellers The firms charge the same price as the competition does, they do not increase or decrease price They seek to achieve competitive advantage Firms respond quickly to the changes in consumer demands
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Impact of Competition
Impact of competition on business Competition mostly has positive impact Businesses strive to achieve efficiency Sales are reduced as another business is also providing the same king of product Businesses have to provide greater variety to the consumers
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Entering new markets
Problems of entering new market Lack of knowledge No contacts Lack of appreciation How to deal with this problem To make aware with the laws and customs The business should hire some local people in the country A detailed market research should be conducted to determine the tastes, needs and wants of the people…
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Increased competition
Impact of increased competition on consumers Positive impact High quality products Lower prices More variety provided Negative impact May have to pay more if competitors engage in a marketing war Impact of increased competition on business Positive impact Operating at efficiency Negative impact Unable to earn abnormal profits Less money available to grow big…