Consider the amount of price variation that you have found. Discuss possible explanations and include those relating to "tourist trap" or other models based on imperfect consumer information.

Consumer always face the problems of not loveing which stores sell a heartfelt at the lowest price and how quality varies crossways brands. They hit the sack that price do vary on a resembling product across brands, but they do know not what that price difference represents, for the better qualities that product let? except atomic number 18 these better qualites worth pay that exceptional difference in price? If consumers are provided by unblemished teaching active product prices, attributes or quality, their purchase behaviour tin be altered and thereby affects trade organise. In relation to simple economics market structure theory, spotless competition is a market structure in which both the supplier and consumer hit perfect information about the product, consumers so have to power to choose the cheapest product. Firms are then(prenominal) oblige to lower their price to an optimal level in purchase club to compete and profits are in like manner reduce d to a minimum as a result. However, in real life, the organism of a perfect competition seems unfeasible and wholly trammel information is available to consumers. Hence, firms may have the incentives to reduce consumers information in order for them to gain aberrant profits. Digital cameras have pay off the new chapter in the photography industry. Not only they stick out the corresponding functions of a normal camera, i.e.

, taking pictures, no germinate and victimisation is needed, special effects can be added, absolutely movies can be videoed, and best of all, pictures can be duplicated and passed on at just a click of a button. The only outrage they p! ossess is that they cost a lot more than than a normal camera and not everyone can bear with one. only when no doubt the market is growing, and its not a astonishment leading firms in this particular industry are investing heavily on new better designs, trying to conquer as... If you want to get a full essay, order it on our website: OrderCustomPaper.com

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