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Why are collusions and cartels unstable in the long run?
When cartels are created, usually in oligopolistic industries, few firms make agreements on things such as production and prices. This ensures that the few firms in the cartel have economic profit and will eventually drive off weaker firms. This usually results in monopolistic behaviors for the remaining firms and eventually the prices catch up to the consumer. Cartels tend to arise in markets where there are few firms and each firm has a signeficant share in the market.
Why Japanese Firms tend to be so competitive?
Japanese firms are competitive because they want to make a profit. They typically do this by expanding outside of Japan.
Why do oligopolies avoid price competition?
Kinked Demand Curve Theory:It shows why prices in oligopolistic markets tend to remain stable, and why price competition creates price wars so firms compete on non-price factors instead.Price is at P on the graph. If one firm raised their price, other firms will lower there price and capture market share from the firm that initially raised its price. This is because more consumers are likely to buy from the firms with a low price rather than high price. So a rise in price results in a bigger fall in demand - ELASTIC demand. This means LOWER REVENUES for the firm that raised prices.If one firm lowered their price, because of interdependence, other oligopolies will also lower their price so as not lose their market share. Therefore firms will be competing on price which means all firms' revenues will be lowered. A decrease in price creates a smaller increased in demand - INELASTIC demand.Therefore, by lowering/raising firms will lose out either way, Therefore, in order to avoid price wars prices remain stable and firms use non-price competition (or firms may collude to create monopoly power).
What are two forms of non-price competition?
Non-price competition refers to firms competing with one another not in terms of reducing the price to attract consumers instead, in form of brand name, advertising, packaging, free home- delivery, free service, sponsorship deals and so on. These are the different forms of non-price competition. The main aim of non-price competition is product development. This kind of competition may obviously exist in monopolistic competition and oligopoly market structure. As products are differentiated in monopolistic competition, to prove and show how ones product is superior than others- colour, appearance, packaging, skill level etc. For example, Salons, Jewellers. It is been done to create an inelastic demand for the product. In oligopoly, the non-price competition is used as a tool to raise the barriers to entry to new firms. The branded consumer goods we consume say, Adidas and Nike, Pepsi and Coke are fall in this oligopoly market structure as few firms dominating the industry. It is been followed by firms because firms in oligopoly do not tend to compete in terms of price. Firms spend huge money on advertising and marketing, persuading to develop brand loyalty.
Which products included in the case of demand curve is inelastic and supply curve is perfectly elastic?
Some of the products which are considered perfectly inelastic are rice, fish, meat, etc., or in short is our basic nessecities. These products are under the perfect competetive market structure that's why if the firms increase its price still, the consumers are tend to buy it cause they dont have other choice but its substitute goods. Some of the products which are considered perfectly inelastic are rice, fish, meat, etc., or in short is our basic nessecities. These products are under the perfect competetive market structure that's why if the firms increase its price still, the consumers are tend to buy it cause they dont have other choice but its substitute goods.
Why are collusions and cartels unstable in the long run?
When cartels are created, usually in oligopolistic industries, few firms make agreements on things such as production and prices. This ensures that the few firms in the cartel have economic profit and will eventually drive off weaker firms. This usually results in monopolistic behaviors for the remaining firms and eventually the prices catch up to the consumer. Cartels tend to arise in markets where there are few firms and each firm has a signeficant share in the market.
Efficiency wage model firms tend to pay workers?
no.
Why Japanese Firms tend to be so competitive?
Japanese firms are competitive because they want to make a profit. They typically do this by expanding outside of Japan.
Why do oligopolies avoid price competition?
Kinked Demand Curve Theory:It shows why prices in oligopolistic markets tend to remain stable, and why price competition creates price wars so firms compete on non-price factors instead.Price is at P on the graph. If one firm raised their price, other firms will lower there price and capture market share from the firm that initially raised its price. This is because more consumers are likely to buy from the firms with a low price rather than high price. So a rise in price results in a bigger fall in demand - ELASTIC demand. This means LOWER REVENUES for the firm that raised prices.If one firm lowered their price, because of interdependence, other oligopolies will also lower their price so as not lose their market share. Therefore firms will be competing on price which means all firms' revenues will be lowered. A decrease in price creates a smaller increased in demand - INELASTIC demand.Therefore, by lowering/raising firms will lose out either way, Therefore, in order to avoid price wars prices remain stable and firms use non-price competition (or firms may collude to create monopoly power).
How large is the average Costco store -?
The average Costco store is about 5000 square meters. This is not large compared to the size of a Walmart store but Costco tend to be smaller than some of their rivals.
Who offers laser cutting services?
Laser cutting is predominantly an industrial venture. As such, the companies that offer such services tend to be small scale specialist engineering firms.
How do interest rates affect small firms which tend to rely on overdrafts and loans for finance?
Adversely, in two ways. As the old saying goes, if you borrow a thousand, you have a problem but if you borrow a million, the bank has a problem! So small firms, which typically will have smaller loan requirements are at the mercy of financial institutions. They may be less credit-worthy, have less collateral that larger firms and so may have to pay a greater premium for borrowing. Small firms are also more likely to have to wait longer before being paid by big firms. As a result, small firms are more likely to require overdraft facilities.
What are the Characteristics of emerging capital markets?
Obviously you can get an investment stake in faster-growing parts of the world simply by owning some of America's biggest and best companies. Better yet, most of these firms tend to be the kind of diversified dividend-paying firms that I continually recommend to you anyway.
Which type of engineer makes the most money?
Named partners in firms that do Corporate Underwriting for Publicly Traded companies tend to earn just a tad more than God.
What are some options for cheap car insurance in Louisiana?
There's a lot of firms in your area. But in general my suggestion would be to go with Allstate. They tend to be able to offer the best rates in Louisiana.
Discuss the relative use of credit between large and small firms Which group is generally in the net creditor position and why?
Larger firms tend to be in a net creditor position because they have the financial resources to be suppliers to credit. The smaller firm must look to the larger manufacturer or wholesaler to help carry the firm's financing requirements.
What kind of accounting internships can college students get?
This depends on where you are interested in doing your internship and how far along you are in your studies. Most colleges have a career counseling office that can help arrange an internship or at least provide you with the names of the local accounting firms and their hiring contact. The bigger firms tend to offer paid, summer internships while smaller firms may only offer unpaid internships (but it is still good experience to have.) In addition, many firms may offer programs during the school year - some may even qualify for class credit. Also use the internet to identify the firms in your area and any opportunities they may offer.
