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PRODUCT DIFFERENTIATION
Product differentiation describes a situation in which there is a single product being manufactured by several suppliers, and the product of each supplier is basically the same. However, the suppliers try to create differences between their own product and the products of their rivals. It can be achieved through quality of service, after sales service, delivery dates, performance, reliability, branding, packaging, advertising or in some cases the differences may be more in the minds of the customers rather than real differences, but a successful advertising can create a belief that a service or product is better than others and thus enable one firm to sell more and at higher price than its competitors.
Consider an economy with two individuals. Individual 1 has (inverse) demand curve for a public good given by P1=60-2Q1, While individual 2 has (inverse) demand curve for the public
SHORT RUN EQUILIBRIUM OF THE FIRM A firm is in equilibrium when it is maximizing its profits, and can't make bigger profits by altering the price and output level for its prod
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Q. Total cost of Factor Combinations? Here we try to find total cost of every factor combination and choose the one that has the least cost. Cost of every factor combination is
Why does the demand curve slope downwards? As Figure above demonstrates, demand curve slopes downward to the right. Downward slope of the demand curve reads the law of demand i
Demand Function for Money In the Keynesian analysis , the demand for money is a function of the level of income and the rate of interest. According to Milton Friedman, the dema
T HE BANKING SYSTEM Consists of all those institutions which determine the supply of money. The main element of the Banking System is the Commercial Bank (in Kenya). The sec
Given a saving function of S = -25 + .2Yd, a $10 billion enhance in government spending will bring about how many dollars of change in consumption?
The following contains cost and benefit information for two different alternatives for a w capital investment in computerized process technologies to control the process at a manuf
Consider a manufactured good whose production process generates pollution. The annual demand for the good is given by Qd=100-3P. The annual market supply is given by Qs=P. In both
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