Effects of market condition on firm and consumer behavior
Table of Content
Introduction......................................
Introduction
Market conditions are defined as characteristics of a market, in which firms operates in or
new products are ...
Market Number and Resource Product Differentiation
Structure Size of Firms Mobility Among Firms
Perfect A relatively large...
Figure 2 Rule of maximizing profit
(a) Short run (b) long run
Figure 3 Firm behaviour in perfect competition
Figure 4 A Pr...
(a) Short run (b) Long run
Figure 5 Firm behaviour in monopolistic competition
Figure 6 kinked demand curves
Conclusion
Th...
 Consumer becomes rational and calm to decide which to purchase through product
price and quality comparison, balance and...
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45. effects of market condition on firm and consumer behavior

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45. effects of market condition on firm and consumer behavior

  1. 1. Effects of market condition on firm and consumer behavior Table of Content Introduction................................................................................................................................ 2 1 Market condition and firm behavior .................................................................................... 2 1.1 Market structure and firm behavior.............................................................................. 2 1.2 Effect of 2008-2009 financial crisis on firm behavior ................................................. 6 2 Market condition and consumer behavior............................................................................ 7 2.1 Consumer behavior....................................................................................................... 7 2.2 Enterprise strategy........................................................................................................ 8 3 Conclusion ........................................................................................................................... 9 4 References.......................................................................................................................... 10
  2. 2. Introduction Market conditions are defined as characteristics of a market, in which firms operates in or new products are about to introduce. These characteristics are included number of competitor, level of competitiveness and growth rate of market. It is indicated in Fabiani et al. (2004) that market conditions have influencing bahavior of individual firms as well as consumers. The 2008- 2009 Financial Crisis was the biggest postwar era downturn. It is affecting largely to lives of millions of people. This study thus focuses on the way market conditions affect firm’s profits and prices targeted in reflects to current 2008-2009 financial crisis; in addition with consumer behaviour influenced along with firm’s strategies changed.
  3. 3. Market Number and Resource Product Differentiation Structure Size of Firms Mobility Among Firms Perfect A relatively large number of No barriers to entry or exit. Firms produce and sell Competition small firms. The output of each Resources are assumed to be homogeneous (identical) firm makes up only a very small mobile (they can be shifted products–each unit of proportion of total market into and out of the market market output is a perfect output. Changes in a single firm's costlessly) and as a substitute for another output level have no measurable consequence, firms can enter unit. effect on total market supply or or leave a perfectly market price. competitive market costlessly. Monopolistic A large number of firms. The Ease of entry and exit–there The output of individual Competition output of each firm is relatively is a high degree of resource firms is differentiated on small compared to the market as mobility. the basis of one or more a whole. charac-teristics, including product quality, advertising claims, consumer perceptions, location, and availability. Oligopoly Small number of dominant firms. Considerable resource The output of firms may Because the market is dominated immobility. Barriers to entry, be either homogeneous or by a few firms, the price and especially economies of differentiated. output decisions of individual scale, limit the threat of firms are mutually competition. interdependent. (In some cases, a market may actually consist of hundreds of firms. However, to the extent that the market is dominated by one or a few firms, it is considered to be an oligopoly.) Monopoly A single firm supplies the entire One or more barriers to entry. Not Applicable market. Although imperfect Consequently, the substitutes for the good or monopolist is able to operate service may exist, the monopolist in a relatively is the only producer of the good. competition-free environment. Figure 1 Types of market structure
  4. 4. Figure 2 Rule of maximizing profit (a) Short run (b) long run Figure 3 Firm behaviour in perfect competition Figure 4 A Profitable Monopolist
  5. 5. (a) Short run (b) Long run Figure 5 Firm behaviour in monopolistic competition Figure 6 kinked demand curves Conclusion This study has reviewed the effects of market conditions on the firm behaviour and consumer behaviour. The following conclusion can be drawn:  Analyzing effects of market conditions on firm behavior is through identification of major market structures, in which targeted outputs and product prices are set accordingly.
  6. 6.  Consumer becomes rational and calm to decide which to purchase through product price and quality comparison, balance and evaluation. These changes in consumer’s behaviour have led to changes in enterprise’s strategic adjustments in order to generate higher profits reflecting market conditions. This document is provided by: VU Thuy Dung (Ms.) Manager Center for Online Writing Resources Facebook : https://www.facebook.com/vu.thuydung.5076 Email : assignmentsource@gmail.com Blogger : http://assignmentsource.blogspot.com/ Website : http://assignmentsource.com/

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