By Gerda MenzelOn Apr 11, 2019 Free Resume
Information about the ecosystem and competition in an industry constitutes a significant advantage. For example, knowledge about component sourcing and supplier pricing can make or break the market for certain companies.
Perfect competition establishes an ideal framework for establishing a market. But that market is flawed and has a couple of disadvantages. The first one is the absence of innovation.
Imagine that a special edition CD of your favorite band is released for $20. Because the record companys previous analysis showed that consumers will not demand CDs at a price higher than $20, only ten CDs were released because the opportunity cost is too high for suppliers to produce more. If, however, the ten CDs are demanded by 20 people, the price will subsequently rise because, according to the demand relationship, as demand increases, so does the price
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