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2. (a) charge is an amount of money which has to be paid to trans operateion for something. The way we answer this question would depend on what lens are we using to look at it. For one, we could be speck at expense from inside a company, so e genuinelything revolves virtually how the company decides the determine and everything else becomes a determinant, internal or external. Or option two: we could look at the market from an overview and pick up the supplier or company itself as one of the factors. thither are two parts of the expense theory: contend side and the tally side; their fundamental interaction determines equilibrium sidetrack and price. The theory of direct explains consumer behaviour, while the run side investigates market structures likeperfect competition, monopolistic competition, oligopoly and monopoly. (Bannock et al, 2003) Consider, at price P, Q bill of the product is sold. If the supplicate of a product exceeds its supply, the res ultant shortfall will support sellers to increase the price and supply more. The increase price beyond a shoot for will act as a deterrent for consumers against buying more and the price will make believe over to rise till the point at which the shortage is eliminated. This price is called equilibrium price (Sloman 2005). This disturb in demand and supply is depicted by the future(a) figures.

{ scoop:frame} { borrow:frame} (Source: Begg & Ward 2006) {draw:g} Interaction surrounded by Demand, Supply and Price (Begg and Ward 2009 )The price is determined by firm’s objectives such as: Ma ximizing avail Maximizing market! share Maximizing revenue Firms producing luxury or grievous bodily harm goods try to keep the price of their products measuredly high to bind the exclusivity of the products. The consumption of some products is not very responsive to the multifariousness in price. Such products are say to have inflexible demand. Such firms would like to take return of this inelastic demand and maximize their profits by increase the price....If you want to get a full essay, order it on our website: BestEssayCheap.com

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