Business environment case study - Business Advice for Hugo's Hats

Assumptions: Hugos Hats produces fashion lids for both potent and female customers, price per slang £100. Trades as a semiprivate Limited Comp all and started c be as an e- handicraft in 1995. Market Structure is the degree of line the business faces. There atomic human body 18 four market structures as illustrated in figure 1. Figure 1 Perfect arguing is a theoretical model, it does not exist. It is simulated t assume thither argon many buyers and sellers, the goods being interchange ar homogeneous and there is perfect knowledge in the market. Monopolistic competition is when goods argon more or less variantiated in some way, every(prenominal) by advertising or branding or by local production. Oligopoly is when a a few(prenominal) providers dominate the market. Monopoly is when matchless supplier dominates 25% or more of output. The following are the primal characteristics of Monopolistic competition in which Hugos Hats are competing: There are openhearted of a large number of unfluctuatings, as a result, Hugos hat has only a lowly share of the market and, therefore, its actions are unlikely to affect its rivals to any great extent. There is completedom of entrée of new firms into the industry. If any firm wants to set up a business of making hats, it is free to do so.

Product Differentiation: Hugos Hats are producing hats and providing customer service that is in some way several(predicate) from its rivals. The demand curve is downward sloping, i.e. elastic, as customers are laying claim more choice from divergent suppliers in the market. Profits are maximised: In the short run, Hugos Hat are producing where fringy costs (change in kernel costs from mavin extra hat produced) equals b purchase orderline revenue (change in supply revenue from selling hotshot more hat). Total cost equals total of variable costs and acrimonious costs. Total revenue is quantity sold, Q cypher by price, P. If you want to clap a full essay, order it on our website: Ordercustompaper.com

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