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How would you determine the market demand for your firm's IT services?
Wiki User
∙ 11y ago
Hold focus groups to assess your services.
Wiki User
∙ 11y ago
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How do horizontal merger vertical merger and conglomerates differ?
A horizontal merger combines two firms in the same market. A vertical merger combines two firms involved in different stages. A conglomerate combines two firms that produce unrelated goods or services. Pretty much they all combine two firms or more but in different ways.
How do money market firms work?
Money market fund firms operate by combining many small investors' funds to accumulate the volume of money needed to buy money market instruments.
What is the stock market used for?
It can be used by firms as a source of financing.
Why would a market that consisted entirely of perfectly competitive firms not be 'perfect'?
The concept of perfect competition is based on a large number of small firms, where no single firm can affect the market price. These firms operate as price takers, and use the cost supplied by the market. These ideal companies would insure efficiency. However, perfect competitive firms are unrealistic in real world scenarios.
Who advises firms when raising capital?
For medium to large size companies, firms typically seek the services of an investment bank.
What is markets in which firms sell their output of goods and services?
The product market is the market in which firms sell their output of goods and services.
What is demand conditions?
The market structure of the market I.e. Barriers to entry #of firms Diversification
Households pay firms for goods and services. Firms supply households with goods and services. The purchase and supply of goods and services takes place in the .?
product market
Households pay firms for goods and services. Firms supply households with goods and services. The purchase and supply of goods and services takes place in the?
product market
Households pay firms for goods and services Firms supply households with goods and services the purchase and supply of goods and services takes place in the?
It's Product Market.
Why the demand curve faced by a perfectly competitive firm is horizontal?
The firm at perfect competition faces more than one competitor. All the firms are price taker and they take the market price as given. If one firm wants to sell its output at a pricehigher than the market price, it will sell nothing as buyers will go to the firm offering lower market price. If one firm wants to sell its output at a lower price, it will take the whole market demand for it. At the market price, determined by interactions between sellers, the firms will sell whatever output it wants. So, the firms determine the price and each firm determines its output. So the demand curve will be horizontal.
Do you expect a firm's demand curve under imperfect competitionto be flatter or steeper than the market demand curve?
Imperfect competition means either having differentiated products and/or significant barriers to entry. The extent of the differentiation and the level of significance of the barriers will determine what kind of general market structure the market will take. Barriers to entry will determine both number of firms in the market and whether it will be easy for new firms to enter. Generally higher barriers to entry entail fewer firms and difficult entry to the market. Though other factors like market size and symmetric information does play a part in determining market structure, lets assume all else constant(ceterus paribus) If the products are homogeneous, there may exist a cournot equilibrium in quantity supplied where the firms guess each other's intended output, and hedge their output on their rival's most probable output. Such a condition would mean that the firm just sets output based on intelligent guesses, but takes whatever price is set by market forces.(they cannot set prices because products are NOT differentiated) . The larger the number of firms, the lower the market share . The larger number of firms means that they face a residual demand based on the number of firms . The elasticity faced by each firm would be n-times the market elasticity, where n is the number of firms. Thus, given homogeneous products the firm's demand curve will be more elastic(based on the number of firms) than the market elasticity(which is also based on n, higher number of firms, closer elasticity is to zero). Competition is deemed inperfect, however, if number of firms is not sufficiently large. This could be due to high barriers to entry(airlines) or other factors. For differentiated products but relatively low barriers to entry, there is the monopolistic competitive market(NOT to be confused with monopoly, which will be touched upon later). In this market, each firm only supplies a small proportion of the total market's total quantity supplied(a change in quantity by the firm will not affect market price). In this case, each firm will generally have a residual demand curve- meaning it will supply whatever the other firms won't or can't, at a particular price. In such an industry, when a firm is faced with a residual demand,the firm's demand curve will be very much more elastic(flatter) than the market's demand curve. Similar to homogeneous products, just that each firm has some market power to set its own price for its goods but not enough to influence market price. For Markets with only a few or several large firms each with significant market share and differentiated products(oligopoly), the fact that the demand curve is kinked means that there is no way to tell whether the demand curve facing the firm will be steeper than the market demand curve as the firm's demand curve has two distinct sections with two different elasticities(slopes). For markets where there is only ONE producer(monopoly) the market demand curve is the firm's demand curve. Thus it will have the same elasticity as the market's demand curve. Thus the firm's demand curve is expected to be flatter(more elastic) or as flat(elastic) as the market's demand curve, except in the case of an oligopoly where the firm's demand curve has more than one slope. Regards 6eXo9 Singapore p.s. feel free to correct me if I'm wrong anywhere, or somewhere.. :)
What are the roles of households and firms in a market?
Consider an economy consisting of households and firms which interact in two markets i.e. the goods and services market in which firms sell and households buy; and the labor market in which households sell labor to business firms or other employees. Required: Illustrate the above economy on a diagram
How macroeconomic equilibrium is attained?
When the demand for goods and services is equal to the goods and services offered (supplied) by firms in the public and private sector of the economy.
What are the roles of household and firm in a market economy?
Consider an economy consisting of households and firms which interact in two markets i.e. the goods and services market in which firms sell and households buy; and the labor market in which households sell labor to business firms or other employees. Required: Illustrate the above economy on a diagram
Relevance of Income elasticity of demand?
-determine the nature of the commodity -it can be applied in the intersection of marked demand and supply of commodities -help firms to respond to changing economic situations.
How do economist determine whether a market is an oligopoly?
A market is an oligopoly when a small number of sellers dominate a market or industry. Economists use a set of criteria to determine whether a market form is an oligopoly. These criteria include profit maximization conditions, ability to set price, high barriers to market entry, a small number of firms, long-run abnormal profits, product differentiation, perfect knowledge of cost and demand functions, interdependence on other firms' marketing strategies, and non-price competition.
