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

Show the efficient method of production, Technically Efficient Method of Pr...

Technically Efficient Method of Production Let's suppose that commodity X is produced by two methods by employing capital and labour: Factor inputs Met

Drafting of price policy, Drafting of Price Policy: Demand forecasts assis...

Drafting of Price Policy: Demand forecasts assist the management to prepare a few appropriate pricing systems, so that level of price doesn't fall and rise to a great extent at th

National income and welfare, NATIONAL INCOME AND WELFARE The relatio...

NATIONAL INCOME AND WELFARE The relationship between National Income and Welfare is best explained in terms of economic growth (By economic growth is meant capacity expansio

Discuss quantity demanded and supplied , Supply and Demand Discuss and...

Supply and Demand Discuss and analyze following statement: The Wall Street Journal reported that recent law school graduates were having a very difficult time obtaining jo

Assumptions of monopolistic competition, Assumptions of Monopolistic Compet...

Assumptions of Monopolistic Competition Monopolistic competition as the name implies, combines features from both perfect competition and monopoly.  It has the following featu

Ans, State the difficulties in the measurement of profit.

State the difficulties in the measurement of profit.

Economic resource , a) The following would most likely shift a production p...

a) The following would most likely shift a production possibilities curve to the right? b) Money should not be considered an economic resource ? c)  Which of the following is

What is labour requirements on the production capacity, Q. What is Labour R...

Q. What is Labour Requirements on the production capacity? Labour Requirements: Spending on labour is one of the most vital elements of cost of production. Dependable and cor

Nature of commodity and income elasticity, For all regular goods, income el...

For all regular goods, income elasticity is positive though the degree of elasticity fluctuates as per the nature of commodities. Consumer goods are generally categorised under thr

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