Identify the Factors of Production Essay
Identify the Factors of Production (Economic Resources Including Natural, Human and Financial Resources), and for Each Factor of Production Give an Example of What Might Be Needed to Operate That Business; By aspirations * Select one of the following businesses: Soft Drink or Laundry Detergent. Assume the business operates in market where the nature of competition is described as “monopolistic competition”. Identify the factors of production (economic resources including natural, human and financial resources), and for each factor of production give an example of what might be needed to operate that business; o And explain how that factor could be used to give the business a competitive advantage. Solution: Soft Drinks: A soft drink (also referred to as soda, pop, soda pop or fizzy drink) is a drink that typically contains no alcohol, though may contain small amounts (typically less than 0. % by volume) and is usually referred to as a sugary drink. Soft drinks are often arbitrated and commonly consumed while chilled or at room temperature. Some of the most common soft drinks include cola, flavored water, sparkling water, iced tea, sweet tea, sparkling lemonade (or other lemon-lime soft drinks), squash, fruit punch, root beer, orange soda, grape
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Generally it is also implied that the drink does not contain milk or other dairy products. Hot chocolate, hot tea, coffee, tap water, Juice, chores or sprinter and milkshakes also do not fall into this classification. Nature of Monopolistic Competition High profile firms with high recognition brands selling similar products Branding and advertising differentiated products as superior unique aspects attracted by supernormal profits supernormal profit : profit that exceeds the normal profit or return from the input factors 1 .
Assumptions Size and Number of Firms Ђ relatively many but some small Barriers to Entry relatively low high Pros and Cons The best thing about monopolistic competition is product differentiation Unlike perfect competition, products arena't generic, they vary in style, taste Unlike monopoly, there are multiple products for varying needs Therefore, both the producer and consumer have market sovereignty However, like a monopoly, there is some inefficiency, and there are not long term profits Examples Soft drink companies