Waste in imperfect competition, Managerial Economics

Assignment Help:

WASTE IN IMPERFECT COMPETITION

Monopolistic competition involves some degree of waste in two aspects.

When new firms enter the industry and the demand for the individual firm's product falls it will be forced to reduce productions.  This means that part of its plant equipment will be unused.  It is said to be operating under conditions of excess of the demand or the market for its product.

In practice, the firm will not allow a situation where it is reduced to a state of lower than normal profits. It will try to maintain its customers against new firms through product differentiation and advertising in an effort to convince customers that its products are the best.  This wastage of   resources, which could be used to expand and exploit economies of scale.


Related Discussions:- Waste in imperfect competition

Objective of fiscal policy, Objective of Fiscal Policy As an instrument...

Objective of Fiscal Policy As an instrument of macroeconomic policy, the goals of fiscal policy are likely to be different in different countries and in the same country in dif

The calculus of optimization, the demand for widgets(x) is given by: px=160...

the demand for widgets(x) is given by: px=160 -4x the production of widget has the following average variable cost: Avc=2x-20 fixed cost are 162 calculate the output level of widg

What is the role of managerial economics in organizations, A. Write a detai...

A. Write a detailed essay on the importance of economics to managers. OR  What is the role of managerial economics in organizations ? B. What are the methods of measuring nation

State the theory of capital and investment, Theory of Capital and Investmen...

Theory of Capital and Investment:  Theory of Capital and Investment evinces the below significant issues:  Selection of a viable investment project Efficient allocatio

Central characteristics of simon satisfying behaviour model, Q. Central cha...

Q. Central characteristics of Simon satisfying behaviour model? The pattern of policy commitments which result from the bargaining process can be seen to be a specification of

Manaerial economics, define scarcityand oppurtunity cost.show how these con...

define scarcityand oppurtunity cost.show how these concepts are useful in managerial decision making

Autonomous expenditure, Autonomous Expenditure Also called Exogenous e...

Autonomous Expenditure Also called Exogenous expenditure, is any expenditure that is taken as a constant or unaffected by any economic variables within our theory.  For instan

Cost concepts, Ask question #MinimumElectron Control, Inc., sells voltage r...

Ask question #MinimumElectron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for their sen

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd