Why a firm is not increasing/decreasing profits
- Created by: Tash5151
- Created on: 16-06-16 15:03
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- Evaluate why the firm is not increasing/decreasing their price
- Highly competitive markets
- Eval: Are goods homogenous
- May be using non pricing strategies
- Eval: May raise cosst depending on strategy ussd
- Monopsony power allows supermarkets to keep costs low by squeezing supliers
- Eval: Depends on the degree of mompsony power
- Kinked demand curve: suggests that price should remain constant to avoid price wars
- Eval: No guarantee firms will react as the model sugests
- May be colluding
- Eval: Collusion is illegal
- Highly competitive markets
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