Hand Made Music Boxes Essay

In a mart where nonmilitant opposition exists, businesses operate in a manner wherein wee-weers sell secernate products from one a nonher, yet similar. This means that the product is not homogenous. Firms slew distillery mart their products by the highlighting the slight differences in their output. The diverse producers in this type of market argon selling their products, in this slipperiness leavesewn euphony boxwoodes, which act as substitutes. Firms argon able to control the prices in some degree within a narrow range of prices.They visualize the market if the receiptss are attractive wherein they displace maximize their profit and are left with excess occupation capacity. In a market where there is monopolistic competition, there are many steadfasts, which each unattackable has a small market share and operates independently from each other. (Salvatore, 2007) Enterprise, natural, churn and chapiter are considered as the factors of production in the economy. Gi ven a soaked that operates a business in hand do music boxes, these factors of production are important as to gain profit and be able to be competitive in the market.In a monopolistic competitive market, it is assumed that all these factors of production are mobile, in which if these are not being apply efficiently, they depart move instantly to where they arse be maximized. (Harvey &type A Jowsey, 2007) In an enterprise, entrepreneurial skills are needed to come and direct the other three factors of production to enable a production of goods or services in the market. Operating a hand do music box needs skills from flock that support managerial experiences that can lead the true into a competitive improvement through impelling planning and execution in producing the goods needed in the market.This will dish up in giving the business a competitive advantage wherein the characteristics of the hand do music box of a certain firm is do with quality than that of other fir ms in the market. (Case & angstrom unit Fair, 2007) No business can operate without natural or sphere as part of its factors of production. debark is where the business is being done. It can be a mill, building, agricultural land or office, but this should have a location for it to be established. An admission charge to land is needed in setting up firms. (Case & Fair, 2007) knock over made music box business needs a factory for the assembly of parts and for storing.Moreover, this business needs a shop for the goods to be displayed so that the goods can be seen by the consumers that will buy the product. annoy to land and property can raise the standard of production as well as be more(prenominal) competent in the market. (American ledger of Economics and Sociology, 2002) Businesses manage to exist because of its labor force. Firms do need people who can do hours of work for them. In making hand made music boxes, there can be a composition of various assembly lines. These assembly lines are made up of people that will do specific parts in making the hand made music boxes of the firm.Skilled workers help the firm in having competitive advantage in the market. In a competitive market, skills of workers are important to produce high quality goods that can be sold to consumers. This will government issue in a high advantage of a certain firm that employs highly skilled workers over those firms that employ lesser skilled people. (Harvey & Jowsey, 2007) In every business setting, capital should be present. Capital refers to equipments used by firms to produce goods. The workers of a hand made music box business need equipments for the production of the goods. These equipments will help the production be more effective and efficient.In a competitive market where contrastive firms compete for products being sold to consumers, a firm needs capital that will increase the quality of the product. This will make the firm more advantageous in terms of output and quality in the market. (Harvey & Jowsey, 2007) Given that the situated market is in a monopolistic competition scenario, a firms demand curve will crossbreed the industrys demand curve at the firms equilibrium level of output and price. (Weins, 1999) This explains why the demand curve is relatively elastic and downward sloping, which can be associated to a flat, but not horizontal demand curve.Firms in this type of market will have less control over price to charge their output. A firm that makes profit in the short-run will break even at last because of a decrease in demand in the long-run, which in this case will result in a zero frugal profit. (Duffy, 1993) Considering the lawfulness of supply, monopolistic competitive markets might not produce large quantities as a response to higher prices. The hindrance to the positive-quantity supply relation is the market control and downward sloping demand curve among monopolistic competitive markets.Monopolistic competitive fi rms are considered to be price-searchers rather than price-takers because prices will permute by the comparison of marginal revenue with marginal cost in every possible price along with the market demand curve. Prices are not placed exist to marginal revenue furthermore, it is not equal to marginal cost and price. Thus, as a result, firms do not essentially supply more quantities of goods at lower prices. (Harvey & Jowsey, 2007) In the short-run, several(prenominal) firms behave like a monopoly thus they can raise their prices go away the consumers options to buy similar goods from other firms.As for the long-run, there is a vindicate entry condition where firms continue to occur in the market exit the demand curve to continually shift leftward until the time when each of the firm earns a zero economic profit. Firms earn economic profit or loss in the short run, but eventually, new entrants will be attracted to profits thus would result to losses until these firms earn ze ro economic profit. The hand made music box firms will compete in the market for the available consumers that will purchase the goods.