ECO201-MicroEconomics Mod 5 CBT Essay Example | Topics and Well Written Essays - 750 words

ECO201-MicroEconomics Mod 5 CBT - Essay ExampleWith higher profitability, the alliance is able to have the financial capacity to improve its technology through additional investment.Improvement in technology and bargaining power over its suppliers make it harder for small-scale players to compete with the existing large-scale companies. not only will the federation with highly improved technology be able to produce much product to meet the securities industry demand but also offer a better role product to the consumers. Therefore, it is more likely that the market structure with cartels is an oligopoly also known as having a less big-time players in the market.Basically, a cartel prohibits a perfect competition to occur since big players within the homogeneous industry be able to openly discuss about the fixed price big transnational companies will impose on self-colored products.to compete more on improving the quality of homogenous products they offer to the consumers asi de from its marketing and promotional activities. In the process, these companies are required to compete in the market through product differentiation and product diversification. (Salin, 1996 pp. 37 38)Basically, the profitability of a large multinational company that manufacture lave product may invest some money in research and knowledge in order to enable the company to innovate new product that could stimulate the interest of its designate consumers. A good example was when arometherapy gain popularity in the market. In line with aromatherapy, a well-known shampoo brand called Palmolive under Colgate-Palmolive started to produce shampoo with different scent of aromatherapy. (Colgate, 2008)Given that large-scale multinational companies that are into cartel situation still has to compete for the same market. For this reason businesses that are able to continuously larn new strategies and innovates new products that could arouse the interest of its target market are the