Economics Essay Example | Topics and Well Written Essays - 1000 words - 1

Economics - Essay Example In micro-economic theory, the supply and demand model attempts to describe, explain and predict the price and quantity of goods sold in competitive markets. This model assumes that markets are perfectly competitive i.e. there are many buyers or sellers, none of whom have the capacity to influence the price of goods or services on offer. A simple supply and demand model is as shown below. The slope of the demand curve indicates that a greater quantity will be demanded when the price is lower. Similarly, the supply curve shows that as prices rise, firms will produce more goods or offer more or better services. The point where these curves meet is the equilibrium point. A market is said to be in perfect competition when no producer or consumer has the market power to influence prices. In such a market, prices of goods would instantly shift to the point of equilibrium as illustrated in the supply and demand graph. In competitive market economies, actual prices tend to the equilibrium prices at which demand equals supply. At the point of equilibrium there is no incentive to change either the price or the quantity. (Stiplitz J & Drifill J, 1993, p 73). Since the price is fixed as the result of interaction of supply and demand, nothing producers can do will aff... that there is no product differentiation. Perfect and Complete Information - all firms and consumers know the prices set by all others. Equal Access - all firms have access to production technologies, and resources are perfectly mobile. Free Entry - any firm may enter or exit the market as it wishes. Since the price is fixed as the result of interaction of supply and demand, nothing producers can do will affect the price and for every unit that sells results in a marginal revenue. They are in a perfect competition, price = marginal revenue = average returns (Whitehead, p 105). Demand has a very direct and immediate effect of prices since the supply factor will always have some lead time, i.e. till adequate stocks are built up or surplus stocks disposed off. This temporary shortage or excess has a bearing on prices. A temporary shortage has the effect of boosting prices, and under the influence of these profits there is an increase in production until supplies one again catch up with demand and until a new equilibrium point is reached, as shown in the figure below. Conversely a drop in demand lowers prices and eventually leads to decreased supply. Thus competition results in a higher output at a lower rice. Monopoly A monopoly is defined as a persistent market situation where there is only one producer of a particular product or service. They are characterized by a lack of economic competition for the goods or services provided including the lack of viable substitutes. As per the Wikipedia Encyclopedia, the primary characteristics of a monopoly are as follows: Single seller - single firm is the sole producer of a product or service. No close substitutes - the product or service is unique. Price maker - a single firm

Cajun Food in South Korea Essay Example | Topics and Well Written Essays - 1250 words

Cajun Food in South Korea - Essay Example Target country for this case is South Korea. South Korean people are very much attracted towards the sea food items. That is why the country is an automatic choice for this business expansion. Food habits of South Korean people are significantly suitable and at par with the Cajun Food item. High level of seafood affinity from Korean people has made this place absolutely suitable for the particular food item. Availability of seafood items has made Korean peninsula an attractive destination for Cajun Foods. The aim of the project is to expand the idea of Kajun food into the market of South Korea by removing its competitor â€Å"The Boiling Crab and Cajun Restaurant Pier 17†. Another way it can deal with it is to start a joint venture with its competitor. Kajun has the motive to explain & elaborate the present trend in the ROI market. The food under consideration originated from the deepest part of Louisiana and Mississippi. The flavors of the food consist of an amalgamation of sea foods with spices. The availability of sea food is ensured by the bordering Japan Sea and Yellow Sea. Sea food always forms a major item of the people living in the boundaries of Eastern Asia. The study confers to expansion into the markets of South Korea. The brand name of this company is Cajun. This brand overcomes the cultural barriers. It gives a youthful perception and tries to increase the frequency of the purchase. This brand delivers a common message to all of its customers. Kajun aims to offer a new taste to the western world with the slogan that the south has risen following Kajun’s lifestyle. The packaging can be done in tinned containers for export purpose. Such packaging system will keep the food fresh. The customers can buy frozen fresh Cajun food. For instant serving the food can be served on platters. The mission of the company is provide best quality food to the customers and so it is advised to make the packaging