Companies Essay Example | Topics and Well Written Essays - 500 words

Companies - Essay ExampleThus non-price emulation prevails in the market and it is up to a particular firm to convince consumers that its product is superior. Only whence can it charge a higher price vis--vis rivals. Given a large number of sellers, secret approval is practically impossibleIn the event of an increase in demand, leading to an increase in price, the firms in the manufacturing may gain higher profits in the short run. However, over time, the existing firms in the market will increase their production capacity or new firms will enter the persistence to take advantage of the higher price. Either way, the supply demand mismatch would vanish and the firms will earn normal profit only.The assumption of symmetry in monopolistic competition, which states that when a new firm enters the industry it draws customers equally from all firms, will lead to negligible change in the CR of the industry.The aforesaid backchat suggests that if Js Assistant Living is to start operat ions, the company will have to offer a differentiated product. The company will not be able to compete on the price go and will earn normal profits in the long run. In case Js Assistant Living does not succeed, it will be able to exit the industry easily.The Concentration proportion (CR) of 80 percent in industry B with 20 firms signifies that there is high concentration in the industry. The industry is oligopoly as the few largest firms account for 80 percent of the market share.In an oligopoly, the market prevail by a relatively small number of large firms. These firms have considerable market male monarch and may either sell standardized products or differentiated products. Each firm realizes that any get going that it makes would be taken note of by competitors. As such, the decisions that a firm takes is strategic in character as it invariably elicits a response from the rivals. The main characteristics of this industry type include barriers to entry and