1 - Factors Influencing Costs And Demands

Question 1

What Can The External Environment Effect?
(2 Points)

Answer 1

~ Costs.

~ Demand.

Question 2

What Is Competitions Effect On Demand?
(4 Points)

Answer 2

~ Lower prices, due to competition.

~ An increase is non-price competition, such as advertising, promotion and product differentiation.

~ Expands consumer choice.

~ Price wars, this can drive down prices.

Question 3

What Is Competitions Effect On Costs?
(4 Points)

Answer 3

~ EOS, due to thrive to increase market share this leads to higher production volumes.

~ Operational efficiency, this reduces costs.

~ Threat of new entrants can push incumbent firms to lower their prices.

~ Pressure to reduce costs to gain a competitive advantage.

Question 4

What Is Market Conditions Effect On Demand?
(4 Points)

Question 5

What Is Market Conditions Effect On Costs?
(4 Points)