Reference no: EM131502377
Most firms and business in our economy operate under monopolistic competition, and product differentiation in this type of markets is one of the main factors that lead to price differentiation and high price elasticity of demand. In addition, and since prices affect quantity demanded inversely (higher prices lead to lower quantity demanded, and lower prices lead to higher quantities demanded), marginal revenue (the additional revenue from producing and selling an additional unit of output) will have a downward slope and will always be lower than prices on the demand curve.
So, since ease of entry is high in the monopolistically competitive market, and since making economic profits will always attract new producers (entrants), how do firms make profits in such environment? Is marginal analysis (cost, revenue, production level) still applicable in determining the optimal level of output?
Provide an example of a firm or a small business from the real world that is surviving the dynamic nature of monopolistic competition and discuss some approaches they have used (or are using) to compete and survive in this environment.
Use the world as your knowledge-generating machine and be critical, after all, there is no "chocolate flavored gas" and all gas sold in gas stations "taste" the same as far as my car's concern, still gas prices are not "identical"!
Small changes in investment spending
: As a result of the multiplier effect, small changes in investment spending can create much larger changes in total output.
|
Healthy population strengthens the economy of the country
: Discuss, with examples, at least four (4) substantive ways in which a healthy population strengthens the economy of the country that you have selected.
|
Market using supply and demand graphs
: During the recent years with new discoveries and technologies, production of natural gas in the US increased significantly
|
What is the time value of money
: What is the time value of money? (in regards too compounding, discounting, risk management and assest valuation.
|
Economy operate under monopolistic competition
: Most firms and business in our economy operate under monopolistic competition, and product differentiation in this type of markets is one of the main factors.
|
Where are they located in the us today
: Where are they located in the U.S. today? Were they forcibly removed from their ancestral lands? How? Do they have a reservation today?
|
Describe the cultural beliefs and biases of subculture
: Describe the cultural beliefs and biases of your chosen subculture, as well as some of their norms and taboos.
|
An integral part of culture and social structure
: How does language, as an integral part of culture and social structure, reflect our statuses, roles, and identities?
|
Marketing research and brand management are redundant
: A sceptic says 'marketing research and brand management are redundant. If a company wants to find out what customers want it should simply look.
|