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

Way to deal with price rises, a) A country should always protect its dome...

a) A country should always protect its domestic industries. Discuss. b) To what extent can a country actually rely on the principle of Comparative Advantage before engaging

Bain''s model of limit pricing, Bain''s limit pricing theory advantages and...

Bain''s limit pricing theory advantages and disadvantages

Marris managerial enterprise model, Why do the managers in marris model max...

Why do the managers in marris model maximise their satisfaction by choosing a higher growth rate and a lower valuation ratio when compared to the profit maximisation

#titlmonopolistic competition and oligopolye.., #quest Describe the oligopo...

#quest Describe the oligopoly market structure and give some examples.ion..

Relationship TR, Explain in brief the relationship between TR,AR and MR und...

Explain in brief the relationship between TR,AR and MR under perfect market condition.

Investment demand theory , In the national income analysis, investment ref...

In the national income analysis, investment refers to the value of than part of the aggregate output for any given time period which takes the form of construction of new structure

Types of elasticity, what are the examples of the types of elasticity (pri...

what are the examples of the types of elasticity (price,income & cross elaticity

Oligopoly , why firms under oligopoly market should follow price rigidity...

why firms under oligopoly market should follow price rigidity?

The contributor of economics, who are the contributors in economics and wha...

who are the contributors in economics and what they contribute in economics

Nature and function of money, The nature and function of money The dev...

The nature and function of money The development of money was necessitated by specialization and exchange.  Money was needed to overcome the shortcomings and frustrations of t

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