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If you have competition between two competing firms they both must offer good service or product with competitive price. Another way to increase sales in a competitive market it to add "features" that customers want, such as free shipping, extended warranties, improved reliability, and so forth, all of which will benefit at least some of the consumers.
When the marginal costs for thousands of "extras" approaches zero, the markets are flooded with goods having "features" that either nobody wants or nobody is willing to pay for.
What else can I help you with?
A market with many firms producing the same good is in?
Perfect Competition
Who are the various actors in the distribution channel?
manufacturing firms,distributors or wholesalers,retailers,consumers
What are the four conditions for Perfect Competition?
Many Buyers and sellers Homogeneous products Free entry or exit of firms Perfect information
What are four basic types of market structure and explain how they differ from one another?
1.) Perfect Competition2.) Imperfect Competition3.) Oligopoly4.) MonopolyIn economics, market structure (also known as the number of firms producing identical products.)Monopolistic competition, also called competitive market, where there are a large number of firms, each having a small proportion of the market share and slightly differentiated products.Oligopoly, in which a market is dominated by a small number of firms that together control the majority of the market share.Monopoly, where there is only one provider of a product or service.Perfect competition is a theoretical market structure that features unlimited contestability (or no barriers to entry), an unlimited number of producers and consumers, and a perfectly elastic demand curve.
What are the factors affecting market structure?
Market structure is influenced by several key factors, including the number of firms in the industry, the type of products offered (homogeneous or differentiated), the ease of entry and exit for new firms, and the degree of market power held by individual firms. Additionally, consumer preferences, technological advancements, and regulatory policies can significantly shape the competitive landscape. The interplay of these factors determines whether a market is classified as perfect competition, monopolistic competition, oligopoly, or monopoly.
How does competition among firms benefit consumers and regulate the market?
Competition among firms benefits consumers by driving innovation, improving product quality, and lowering prices as companies strive to attract customers. This rivalry encourages businesses to differentiate their offerings and enhance customer service, leading to a wider variety of choices for consumers. Additionally, competition acts as a regulatory force in the market, as inefficient firms may be forced to exit, ensuring that only the most effective and customer-focused businesses thrive. Overall, this dynamic fosters a more efficient and responsive market environment.
Suppose a good or service Oh s highly desired but the quantity supplied is limited How does competition among consumers affect profits for the selling firms?
When a good or service is highly desired but the quantity supplied is limited, competition among consumers typically drives prices higher. As consumers compete for the limited quantity, they may be willing to pay more, which can significantly increase the profits for selling firms. This heightened demand can lead firms to maximize their pricing strategies, capitalizing on the scarcity. Consequently, firms can see substantial profit margins until supply can potentially adjust to meet the demand.
What does perfect competition do?
Perfect competion lowers the cost of good and services by increasing the competition among firms.
How do firms benefit from credit purchases?
They can charge extra money for the credit and encourage consumers to spend more.
What term refers to independent firms that agree to eliminate price competition among themselves?
Price fixing is when companies conspire to eliminate price competition among themselves.
Are there other public function that might benefit from more competition including competition from private firms?
Highway departments and public education are two public functions that would benefit from more competition. The incentive to work would be increased in order to keep their jobs.
Are there other public functions that might benefit from more competition including competition from private firms?
Highway departments and public education are two public functions that would benefit from more competition. The incentive to work would be increased in order to keep their jobs.
Why did some people believe that lack of competition would hurt consumers?
Theoretically, competition keeps prices low because various firms vie for the business of consumers. When they compete, they attempt to win a larger market share by lowering prices. Therefore, if competition is lacking, prices will increase. Take a monopoly for example. No competition means they can set really high prices.
Why is monopolistic competition inefficient compared to perfect competition?
Monopolistic competition is inefficient compared to perfect competition because firms in monopolistic competition have some degree of market power, allowing them to set prices higher than in perfect competition. This leads to higher prices for consumers and less efficient allocation of resources. Additionally, firms in monopolistic competition may engage in non-price competition, such as advertising, which can further reduce efficiency.
How does competition of firms in macroeconomics and microeconomics affect the economy?
In microeconomics, competition among firms leads to increased efficiency, innovation, and better quality products, as businesses strive to attract consumers. This competition helps regulate prices and ensures that resources are allocated effectively. In macroeconomics, a competitive environment can drive economic growth by fostering entrepreneurship and increasing overall productivity, contributing to higher employment rates and improved living standards. However, excessive competition may also lead to market failures or monopolistic behaviors if not properly regulated.
Why do small firms continue to exist despite the issue of competition?
why do small firms continue to exist despite competition from large firms
What are advantages of imperfect competition in south Africa?
Imperfect competition in South Africa can foster innovation and diversity in products, as firms differentiate their offerings to attract consumers. This environment encourages businesses to improve quality and customer service, benefiting consumers. Additionally, it allows smaller firms to establish a market presence and contribute to economic growth, leading to job creation. However, while there are advantages, it can also result in higher prices and reduced efficiency compared to perfect competition.
