Assignment for Managerial Economics
Find an actual news story that talks of either a demand shock or a supply shock
(not Covid-19 related) and show (using demand-supply graphs) the effect on
equilibrium price. What is the nature of the market - perfectly competitive,
oligopolistic or a monopoly? Submit a write-up of max 500 words. IF THE ANSWER IS A SPAM I WILL REPORT.
Answers
Hey Mat e!
"severe demand shock" for the Indian economy and could lead to further moderation in the country's GDP growth as the causing significant disruption across multiple sectors, says a report.
According to Dun & Bradstreet, besides the impact on human lives and global supply chain, the pandemic is a severe demand shock which has offset the green shoots of recovery of the Indian economy that were visible towards the end of 2019 and early 2020.
"A fall in the optimism levels amid heightened uncertainty has led to a 'double whammy' - closure of businesses leading to global supply chain disruptions and a steep fall in the consumption," said Arun Singh, chief economist at Dun and Bradstreet India.
In perfect competition, there are many small companies, none of which can control prices; they simply accept the market price determined by supply and demand. In a monopolyMarket in which there is only one seller supplying products at regulated prices., however, there's only one seller in the market.
It May Help U 1
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Answer:
Imperfect competition is a competitive market situation where there are many sellers, but they are selling heterogeneous (dissimilar) goods as opposed to the perfect competitive market scenario. As the name suggests, competitive markets that are imperfect in nature.
Description: Imperfect competition is the real world competition. Today some of the industries and sellers follow it to earn surplus profits. In this market scenario, the seller enjoys the luxury of influencing the price in order to earn more profits.
If a seller is selling a non identical good in the market, then he can raise the prices and earn profits. High profits attract other sellers to enter the market and sellers, who are incurring losses, can very easily exit the market.
There are four types of imperfect markets:
- Monopoly (only one seller) - Oligopoly (few sellers of goods) - Monopolistic competition (many sellers with highly differentiated product) - Monopsony (only one buyer of a product)