If successful this increases a firm’s market share and makes the demand for individual product ranges more inelastic. Notes – Agency Construction Management. For complaints, use another form. Each seller produces branded products – and the strength of brand loyalty is vital in sustaining profits in the long run. Explicit mention should be made of productive, allocative and dynamic efficiency.
You can add this document to your saved list Sign in Available only to authorized users. Economies of scale reduce the firm’s long-run average costs and raise the profit margin on each unit sold. Mention should be made of the following: Oligopoly Date 30 December Question: Those firms able to exploit economies of scale will be better able to lower prices and still make an economic profit.
If two businesses take most of the industry’s demand, the market can be described as a duopoly.
Mention should be made of the following: Firms may move away from short-term profit maximisation in an attempt to improve cash flow or raise market share by heavy discounting of products sometimes below the average cost of supply a “loss-leading strategy”.
Measures to increase and sustain market power: Mergers and take-overs are mechanisms to achieve external growth of a business and raise market share. Predatory pricing occurs when a firm attempts to drive another supplier out of the market by lowering prices esxay to impose losses on other businesses. If successful this increases a firm’s market share and tutor2y the demand for individual product ranges more inelastic.
Theory of the Firm Diagram Questions. Teaching Theory of the Firm at A Level. Upload document Create flashcards.
Oligopoly Date 30 December Question: Your e-mail Input it if you want to receive answer. Explicit mention should be made of productive, allocative and dynamic efficiency. Barriers to entry allow producers to prevent the successful entry of new producers into the market.
In recent years there has been a surge in merger activity in oligopolies – for example the global car industry and telecommunications. Explain how a firm econimics in an oligopolistic industry can attempt to increase its market share An oligopoly is a market dominated by a few producers each of whom has some degree of market power. Persuasive advertising ecoonmics to change consumer preferences and may have the impact of distorting consumer preferences by changing the perceived utility or satisfaction from consuming a product.
Tutor2u Economics Essay Plans For more resources to improve your grade potential go to www. Add to collection s Add to saved.
Essay Plan on Oligopoly
You can add this document to your study collection s Sign in Available only to authorized users. Investigating the market structure of M-Pesa. Suppose 2 firms compete on quantity with inverse demand. A distinction should be made between price and nonprice competition in the first half of the essay.
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Those firms able sconomics exploit economies of scale will be better able to lower prices and still make an economic profit. For complaints, use another form.
Essay Plan on Oligopoly
Examples of oligopolistic industries should be mentioned at the start or developed through the answer: Consumer’s become less sensitive to price changes if they tend to consume products habitually. If the market is contestable, the threat of potential entry by more efficient firms should help tutoru2 ensure that incumbent firms operate within the public interest and do not abuse their market power.
Answers to Workshop 5. Add this document to saved. Consumer loyalty cards; Online shopping and home delivery Twenty-four opening hours and Guaranteed after-sales service Price competition Price wars are a common characteristic of oligopolies. The five-firm concentration ratio measures the combined market share of the leading five firms in the market.
Econpmics seller produces branded products – and the strength of brand loyalty is vital in sustaining profits in the long run. Add this document to collection s.