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SALES MAXIMIZATION: The notion that business firms (especially those operating in the real world) are primarily motivated by the desire to achieve the greatest possible level of sales, rather than profit maximization. On a day-to-day basis, most real world firms probably do try to maximize sales rather than profit. For firms operating in relatively competitive markets, facing relative fixed prices, and relatively constant average cost, then increasing sales is bound to increase profits, too. Moreover, according to the notion of natural selection, even firms that seek to maximize sales, those that also maximize profit will remain in business.
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Lesson 5: Demand | Unit 2: Law of Demand
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Page: 6 of 20
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An important question is: Why does the law of demand work? Two reasons are income effect and substitution effect. First, the income effect. This is the change in quantity demanded that results because a change in price gives a buyer more real income, even though money income remains unchanged. - The reason is that buyers have limited income.
- Any change in price affects the purchasing power of buyers' limited income. A higher price means a given income can buy less and a lower price means a given income can buy more.
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OLIGOPOLY A market structure characterized by a small number of large firms that dominate the market, selling either identical or differentiated products, with significant barriers to entry into the industry. This is one of four basic market structures. The other three are perfect competition, monopoly, and monopolistic competition. Oligopoly dominates the modern economic landscape, accounting for about half of all output produced in the economy. Oligopolistic industries are as diverse as they are widespread, ranging from breakfast cereal to cars, from computers to aircraft, from television broadcasting to pharmaceuticals, from petroleum to detergent.
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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time calling an endless list of 800 numbers looking to buy either super soft, super cuddly, stuffed animals or a large stuffed brown and white teddy bear. Be on the lookout for spoiled cheese hiding under your bed hatching conspiracies against humanity.
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This isn't me! What am I?
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More money is spent on gardening than on any other hobby.
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"Progress always involves risk. You can't steal second base and keep your foot on first. " -- Frederick B. Wilcox
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SIC
Standard Industrial Classification
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