Demand & supply
Price of steel depends upon the demand & supply of steel in international & domestic market
Price elasticity
Elasticity is the the reaction of customer towards the change in price. In steel industry price changes day by day due to various factors but demand does not change drastically with price, steel market is demand driven not price driven where the quantity demanded determines where the quantity demanded determines the price but opposite is not true.
Marginal cost
The cost added by producing one additional unit of product
Year Marginal cost(in crores)
2013-14. 2.4055
2014-15. 19.2715
2015-16. -2.127
2016-17. 5.790
Agglomeration
Tata steel jamshespur has Tata motors and mines in jamshespur so it's convenient for Tata steel to procure raw material and supply steel due to which transportation cost has been significantly decreased
Oligopoly
Steel has an oligopoly market i.e. a few dominant sellers they sell differentiated or homogeneous product under continuous consciousness of rivals action
The main competitors of Tata steels in India and JSW steel with a revenue of $7 billion.
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