Peace

Monday, July 02, 2007

on a random note,

in this industries, many oligopolies, and small emerging firms strife to exist.
there have been eras of monopolies, but often are few and short-lived.
as we learnt, oligopolies in general, due to large economies of scale, somewhat ability to set price, are capable of earning supernormal profits.
they also have the potential for dynamic efficiency to be obtained should R&D be an aspect which they develop.
hence, they are able to produce more and sell at a higher Price above market equilibrium.
this makes life an uphill climb for smaller firms.
with near negligible economies of scale, small firms have to absorb high costs of infrastructure and capital costs.
so you might be wondering, if barriers to entry into this trade are reasonably high with the presence of oligopolies(sometimes natural monopolies), why do this small firms bother trying to get in? well u see, this business is suppose to be the route which has the greatest potential for future success measured by material well being(obviously non-material wellbeing is not taken into consideration at all).
in singapore the situation is highly competitive. this good thing is, the govt has implemented certain policies that aid firms in getting into the industry. these includes subsidies and guidance from experienced firms. the bad thing is of cos, that each firm must produce a minimum quantity at a reasonable price such that TR-TC is statistically nice to look at.
hence, sometimes smaller firms which are unable to enter into the industry successfully, fall out.

ok go figure.
maybe if i can think of stuff thats relevant i ll post it in the next post.

[ Peace out! ]
at5:45 PM

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