Short run output and price, Managerial Economics

Assignment Help:

SHORT RUN OUTPUT AND PRICE

In monopolistic competition, it's the product differentiation that permits its price without losing sales. 

Due to brand loyalty consumers will continue buying a particular product as preferred to all other brands in spite of increases in the price of that product.

If one firm lowers its price it may capture a few more customers therefore expanding its sales over and above the traditional customers.  Besides the product differentiation need not be physical, only the customers need to feel the products are different.

Generally the demand for one seller's product will be price elastic due to close substitutes.  If one firm raises its prices, TR will go down.  If the price is reduced there are possibilities of substantial increase in revenue because of capturing some customers from rivals.

The level of elasticity will depend on the strength of product differentiation.


Related Discussions:- Short run output and price

Why do managers need to know economics?, Economics contributes a great deal...

Economics contributes a great deal with towards the performance of managerial duties and responsibilities. Just as biology donates to the medical profession and physics of engineer

Nature and function of money, The nature and function of money The dev...

The nature and function of money The development of money was necessitated by specialization and exchange.  Money was needed to overcome the shortcomings and frustrations of t

External debt problem, External Debt Problem External debt refers to d...

External Debt Problem External debt refers to debt owing by one country to another.  External debt is a more serious problem than internal debt because the payment of interest

Explain about frequency domain, Q. Explain about Frequency domain? Fre...

Q. Explain about Frequency domain? Frequency domain:   Frequency domain is a term which is used to elucidate the domain for analysis of mathematical signals or functions with

Location problem in the plane, Location problem in the plane: In Kent, ...

Location problem in the plane: In Kent, the council to respond to the people and government needs, it decided to establish 3 community care homes. The towns are recorded with t

Gains from international trade, Gains From International Trade The gai...

Gains From International Trade The gains from International trade are to make the participating countries better of than they would have otherwise been.   This will be the res

Remedies for unemployment, REMEDIES FOR UNEMPLOYMENT The measures appro...

REMEDIES FOR UNEMPLOYMENT The measures appropriate as remedies for unemployment will clearly depend on the type and cause of unemployment.  Broadly they can be divided into:

Amount of labor , One lumber producer may locate a plant in the same area....

One lumber producer may locate a plant in the same area.  If it does, there will be more competition for labor and the labor supply function facing Northern will shift to

Simon satisfying behaviour model, Q. Simon satisfying behaviour model? ...

Q. Simon satisfying behaviour model? The behavioural approach as developed in particular by Richard Cyert and James G. March of the Carnegie School, lays emphasis on explaining

Electron control inc, electron control,inc.,cells voltage regulators to oth...

electron control,inc.,cells voltage regulators to other manufacturers , who then customize and distribute the products to quality assurance labs for their sensitive test equipment.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd