Supermarket Price Wars

In: Business and Management

Submitted By Wese
Words 1523
Pages 7
Introduction
The assignment aims at critically evaluating the statement, “The recent price wars in the supermarket and mobile phone industries have been beneficial to both consumers and their respective industries” by using various theoretical models. For this, we will also consider various microeconomic models such as Supply, Demand, Market equilibrium, Price discrimination, Opportunity cost. In the other part of assignment, we have critically evaluate the statement, “The cost of mobile phones have fallen to such a level which, if this trend continues ,would make mobile telephony more affordable to much larger segments of the emerging markets population” using various macroeconomic models such as Growth, Inflation, Unemployment, GDP. By definition, macroeconomic models are defined as the analytical tools designed to describe the operation of the economy. On the other hand, the microeconomic models are tools used to describe the behavior of individuals and small organizations in decision-making (Laberge, 2003). The research methodology used to formulate this essay is qualitative in nature. Various secondary resources have been referred including case studies and published & unpublished articles while writing this essay. These secondary resources might have some errors which can reflect in the essay. Hence, credibility, reliability and validity of the information need to be considered.
Part 1:
Price war is a concept used commonly in markets and arises due to rigorous competition between two or more companies (Laberge, 2003). By definition, it is defined as the concept of economic activity of high competitive market between different firms in industry (Laberge, 2003). Generally, if one firm cuts its price of products then other firm is likely to do same in order to get in price war. Price war aims at attracting more and more consumers by offering affordable…...

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