Assignment MicroEconomics

Added on -2019-09-20

| 8 pages
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Microeconomics 1Microeconomics studies the behavior of individual firms and consumers and study their behaviorin making decision regarding allocation of scare resources.First Case study is of food choices, New Steak on the Block, Steakhouses, and Butchers Serve upDifferent Cuts; Chuck Becomes a Flat Iron FiletSteakhouses are making changes in menu and redesigning their interior to attract more customers. There are varieties of new dishes added in the menu and so thus the price hike in the menu card. Improvement in taste put the extra burden on consumer pocket. New restaurants using different techniques to attract consumers they spend lavishly on an interior, hiring chef andpromoting their products through celebrities. They have only this choice to endorse their product as there are so many substitutes available in the market. There are many concepts used in above case study first is the market structure in microeconomics. There are the different market structure in an economy perfect competition, monopoly, monopolistic completion, oligopoly, duopoly, and monopsony. Different markets have different features; the above case is a case of monopolistic completion; Monopolistic competition also called competitive market, where there is a large number of firms competing and selling the same product but with different feature. The products of different firms are not altogether different; they are slightly different from others, each having a small proportion of the market share. There are free entry and exit of firms in the monopolist competition, so there is also market influences on sales and profit of the firm.The most different feature from other markets in monopolistic competition is selling cost: the case study is all about selling cost that how food chains create a difference in their products packing, promotions activities and adding different features. Producers have to incurred different
Microeconomics 2types of expenditures; advertisement, campaign, and endorsement are the most important constituent of the selling cost which affects the demand as well as a cost of production. The focus of monopolist is to maximize profits and therefore, they adjust the expenditure accordingly.Innovation and creating new product to stand out in the entire competitor in the market is the keyto capture the maximum profit in the market. Like the case study depicts Steakhouses tried to adopt into taste and new dishes into their menu card with different attracted names so that he willable to differentiate their products from existing products in the market. Likewise in the given topics “Reviving McDonald” McDonald’sis planning to overhaul its U.S. menu by addingmore customizable options and appealingto regional tastes, a move that the world’s largest fast-food chainsays is aimed atreinvigorating its business afteranother quarter of sinking profitsand sagging sales. In second case study: Kellogg's Breakfast Gamble. There is merge between Kellogg's with kasha co. in 2000 which leads to increase in kasha sales, kasha company sales had soared by 24 times by launching the new product as per the new consumer taste.In this case, another market structure used for making the higher profit by producers, it is the case of the cartel. A cartel is defined as a group of firms that gets together to make output and price decisions, so thus the both breakfast companies did. Cartel arises when there are firms selling a similar product and rivals of each other. Something merger leads to monopoly and helps in attaining maximum profit. Oligopolistic firms join a cartel to increase their market power, and members work together to determine jointly the level of output that each member will produce and/or the price that each member will charge. By

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