Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 24, Problem 7CQ
To determine
High barriers to entry.
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QUESTION 2:
Consider a competitive market. There are X number of firms in this market. Every firm is facing the following set up:
a. How does the number of firms in the industry, affect each firm's demand curve? Why?
b. What will be the production in this market? What price will the companies charge? How much profit will firms make?
c. What is the minimum number of firms in the market so that everyone is making losses?
d. How many firms will exist in this market in the long-run?
Choose a product or service that you are familiar with (something you use or have used, something related to a job you or someone close to you has held, etc.). Are there a lot or few firms in the industry? Are the products similar or identical or without close substitutes? Are there barriers to entry and, if so, what are they?
Traditional economic theory asserts that in a situation of perfect competition where there is
perfect knowledge and perfect substitutes available, price is the primary basis of
competition and the primary determinant of demand (Phillip Kotler, principles and practice
of marketing).
Required:
A. Discuss the advantage and disadvantage of seeking competitive advantage through price.
B. Explain the various pricing strategies available to a marketer launching a new product in
Zambia and make reference to examples of products that they would best fit.
Chapter 24 Solutions
Economics: Private and Public Choice (MindTap Course List)
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