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Why do small firms continue to exist despite the issue of competition?
Wiki User
∙ 10y ago
why do small firms continue to exist despite competition from large firms
Wiki User
∙ 10y ago
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What type of competition would most likely exist with a four-firm concentration ratio of 94?
Either an oligopoly (dominated by a few firms) or monopoly (if these 4 firms collude - control price and supply)
Which is the reason why there is no advertising by individual firms under pure competition?
Under pure competition, firms produce a homogeneous product, so there is no reason to advertise. Pure competition is also known as perfect competition.
What illegal economic function causes business firms to combine to prevent competition?
A cartel or monopoly causes business firms to combine to prevent competition.
Supernormal profit of monopolistic competition?
In the short run, abnormal profits exist but in the long run, it gets eroded away because new firms enter the industry.
There is no control over price by firms in?
Pure competition
Why do governments use patents to block entry into some markets when patents prohibits competition?
They use the patents to do just that, they input patents so the firms that are already in the market continue without competition. Depending on the situation government officials can be paid off to input these patents so firms in the current market can continue their oligopoly.
What type of competition would most likely exist with a four-firm concentration ratio of 94?
Either an oligopoly (dominated by a few firms) or monopoly (if these 4 firms collude - control price and supply)
Why do Firms trying to avoid competition?
Firms try to avoid competition so that they can set higher profits and earn greater profits.
Which is the reason why there is no advertising by individual firms under pure competition?
Under pure competition, firms produce a homogeneous product, so there is no reason to advertise. Pure competition is also known as perfect competition.
What illegal economic function causes business firms to combine to prevent competition?
A cartel or monopoly causes business firms to combine to prevent competition.
Supernormal profit of monopolistic competition?
In the short run, abnormal profits exist but in the long run, it gets eroded away because new firms enter the industry.
Why do small firms exist?
Small firms exist because they help strengthen the economy. Smaller firms create jobs and pay taxes that help support the community.
There is no control over price by firms in?
Pure competition
How do firms engage in price competition?
Firms might engage in price competition by advertising that they offer the lowest price on selected merchandise. Price competition lowers the selling price of the good, relative to competitors' prices.-From Usatestprep.com
Why do firms exist Adam smith?
Firms exist in order to minimize transactions costs. Tough that is only one of many reasons.
What is the difference between oligo polistic competition and pure monopolistic competition?
In monopolistic competition, firms capture monopoly profits through specialisation of their product, making it non-substitutable with competing firms' products. In oligopolistic competition, this does not occur. Instead, three are three general outcomes: 1) firms collude to mimic a monopoly and share monopoly profits; 2) a dominant firm leads the market and sets the price; 3) firms compete freely and but take each other's decisions into account.
What is the explanation for the features of monopolistic competition?
Existence of large firms, no competition and influence over the prices are some of the characteristics of monopolistic competition.
