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

International financial institutions, INTERNATIONAL FINANCIAL INSTITUTIONS ...

INTERNATIONAL FINANCIAL INSTITUTIONS In July 1944, a conference took place at Bretton Woods in New Hampshire to try to establish the pattern of post-war international monetary

Quality controls - importance of demand forecast, Quality and Quantity Cont...

Quality and Quantity Controls: Demand forecasting is a necessary and valuable instrument in the control of management of an organisation to provide finished goods of correct quant

Amount of labor , One lumber producer may locate a plant in the same area....

One lumber producer may locate a plant in the same area.  If it does, there will be more competition for labor and the labor supply function facing Northern will shift to

Disadvantages of perfect competition, Disadvantages of Perfect Competition ...

Disadvantages of Perfect Competition There is a great deal of duplication of production and distribution facilities amongst firms and consequent waste. Economies of sc

Elasticity and consumption expenditure, The relationship between, total exp...

The relationship between, total expenditure and price elasticity of demand has summed up in the below table: Table: Elasticity and Consumption Expenditure Elas

Cost, define scarcity and opportunity cost..

define scarcity and opportunity cost..

Advantages of planned economy, Advantages of Planned System i)   Uses...

Advantages of Planned System i)   Uses of resources :  Central planning can lead to the full use of all the factors of production, so reducing or ending unemployment. ii

Uses of national income figures, USES OF NATIONAL INCOME FIGURES We...

USES OF NATIONAL INCOME FIGURES We need national income statistics to measure the size of the "National cake' of goods and services available for competing uses o

Long-term policies to cure balance of payment deficits, Long-Term Policies ...

Long-Term Policies One long term option of tackling balance of payments deficit is export promotion .  In the long run this is the best method of improving a balance of payme

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