Nature of costos

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  • Publicado : 2 de mayo de 2011
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* The nature of costs (including the potential for firms to exploit economies of scale and also the presence of sunk costs which affects market contestability in the long term)
* The degree towhich the industry is vertically integrated - vertical integration explains the process by which different stages in production and distribution of a product are under the ownership and control of asingle enterprise. A good example of vertical integration is the oil industry, where the major oil companies own the rights to extract from oilfields, they run a fleet of tankers, operate refineries andhave control of sales at their own filling stations.
* The extent of product differentiation (which affects cross-price elasticity of demand)
* The structure of buyers in the industry(including the possibility of monopsony power)
* The turnover of customers (sometimes known as “market churn”) – i.e. how many customers are prepared to switch their supplier over a given time periodwhen market conditions change. The rate of customer churn is affected by the degree of consumer or brand loyalty and the influence of persuasive advertising and marketing The nature of costs (includingthe potential for firms to exploit economies of scale and also the presence of sunk costs which affects market contestability in the long term)
* The degree to which the industry is verticallyintegrated - vertical integration explains the process by which different stages in production and distribution of a product are under the ownership and control of a single enterprise. A good exampleof vertical integration is the oil industry, where the major oil companies own the rights to extract from oilfields, they run a fleet of tankers, operate refineries and have control of sales at theirown filling stations.
* The extent of product differentiation (which affects cross-price elasticity of demand)
* The structure of buyers in the industry (including the possibility of...
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