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  • 21MBA1008 - SRIRAM A Economics Case Study 02

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    This document is a case study analysis for an economics course. It discusses a business owner who was initially the only operator in the market but then faced competition from others. When competitors entered the market, they offered lower prices than the business owner. Even when the owner lowered prices by 50%, sales still dropped 20% due to customers having more variety and options that better matched their tastes. The document recommends strategies for the owner to improve sales, such as adding more products tailored to customer preferences, further reducing prices while maintaining minimum profits, and increasing advertising expenditures to boost sales.

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    This document is a case study analysis for an economics course. It discusses a business owner who was initially the only operator in the market but then faced competition from others. When competitors entered the market, they offered lower prices than the business owner. Even when the owner lowered prices by 50%, sales still dropped 20% due to customers having more variety and options that better matched their tastes. The document recommends strategies for the owner to improve sales, such as adding more products tailored to customer preferences, further reducing prices while maintaining minimum profits, and increasing advertising expenditures to boost sales.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    4 views2 pages

    21MBA1008 - SRIRAM A Economics Case Study 02

    Uploaded by

    sriram
    This document is a case study analysis for an economics course. It discusses a business owner who was initially the only operator in the market but then faced competition from others. When competitors entered the market, they offered lower prices than the business owner. Even when the owner lowered prices by 50%, sales still dropped 20% due to customers having more variety and options that better matched their tastes. The document recommends strategies for the owner to improve sales, such as adding more products tailored to customer preferences, further reducing prices while maintaining minimum profits, and increasing advertising expenditures to boost sales.

    Copyright:

    © All Rights Reserved
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    of 2

    APPLIED ECONOMICS FOR MANAGERIAL

    DECISIONS

    NAME OF THE STUDENT: SRIRAM A


    REGISTRATION NO: 21MBA1008

    FACULTY NAME: Prof. Aruna R


    COURSE CODE: BMT5111
    SLOT: B2+TB2

    Case Study 02
    1) At first, he was the only one who operated in the market as the competitors
    emerged people substituted his products and services and bought goods from his
    competitors. He has suffered a substation effect as the price of the other relevant
    product decreases the demand of the product (one which people buy) will also
    decrease and from the case its known that he is selling at high price than the sellers
    in Delhi city. Even though he reduced the price to half his sales is reduced by 20% is
    because customer got more Varity of products which match their taste and
    preferences.

    2)

    I. To improve his sales, he can add more products which matches the
    consumer’s taste and preference

    II. he can reduce the price and keep his profit at minimum level so that the
    demand of the product increases

    III. he can advertise more as advertisement expenditure has direct relationship


    with sales when advertisement expenditure increases the sales will also
    increase

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