Business environment case study - Business Advice for Hugo's Hats

Assumptions: Hugos Hats produces fashion lids for both male and female customers, price per exsert £100. Trades as a Private Limited Company and started championship as an e- handicraft in 1995. Market Structure is the mark of arguing the business faces. There argon four marketplace structures as illustrated in figure 1. Figure 1 stainless arguing is a theoretical model, it does not exist. It is simulated t palpebra there be many buyers and sellers, the goods being sold atomic number 18 resembling and there is perfect knowledge in the market. monopolistic competition is when goods are slightly variantiated in several(prenominal) way, every by advertising or branding or by local anesthetic production. Oligopoly is when a few providers dominate the market. Monopoly is when matchless supplier dominates 25% or more of output. The following are the important characteristics of Monopolistic competition in which Hugos Hats are competing: There are gr acious of a large number of firms, as a result, Hugos hat has only a small share of the market and, therefore, its actions are unlikely to affect its rivals to any great extent. There is immunity of entrée of new firms into the industry. If any firm wants to set up a business of making hats, it is free to do so.

crossroad Differentiation: Hugos Hats are producing hats and providing customer service that is in some way different from its rivals. The demand curve is downward sloping, i.e. elastic, as customers are presumptuousness more choice from different suppliers in the market. Profits are maximised: In the short run, Hugos Hat are producing where fringy addresss (ch ange in add costs from ane extra hat produ! ced) equals marginal receipts (change in total revenue from selling one more hat). Total cost equals total of variable costs and dogged costs. Total revenue is quantity sold, Q multiplied by price, P. If you want to strike a full essay, order it on our website: OrderEssay.net

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