PROFIT SIGNALLING MECHANISM

julierubio0216
Mind Map by , created over 5 years ago

A-level ECONOMICS AND BUSINESS STUDIES Mind Map on PROFIT SIGNALLING MECHANISM, created by julierubio0216 on 04/02/2014.

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julierubio0216
Created by julierubio0216 over 5 years ago
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PROFIT SIGNALLING MECHANISM
1 HIGN PROFITS ARE MADE IN A MARKET
1.1 WHICH MEANS DEMAND FOR P AND S ARE NOT SATISFIED
1.1.1 RESOURCES CAN BE ALLOCATED INTO THE PROFITABLE MARKET
1.1.1.1 COMPETITION WILL INCREASE IN THIS MARKET
1.1.1.1.1 SUPPLY INCREASES
1.1.1.1.1.1 PRICE DECREASES
1.2 HIGH PRICE CAN BE CHARGED
2 LOW COMPETITION
2.1 HIGH PROFTS
2.2 LOWER CONSUMER CHOICE
2.2.1 CONSUMERS UNSATISFIED(DEMAND RISES)
2.2.1.1 RESOURCES OF A BUSINESS CAN BE REALLOCATED IN THIS MARKET
2.2.1.1.1 HIGH PRICE CAN BE CHARGED
3 MONOPOLY POWER
3.1 SUPERNORMAL PROFITS
3.1.1 HIGH BARRIERS TO ENTRY

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