Oligopoly Market
It is a state where limited
competitors are present and the market is shared by less number of sellers. For
coca cola competitors are Sprite, Fanta, Mountain Dew.
People Respond to Incentives
An incentive is something which
makes a person to act. It may be a reward or offer. If any Paytm offer or
cashback is given in coca cola, people buy it more.
Marginal Rate of Substitution
The marginal rate of substitution
is defined as the rate at which a consumer is ready to exchange the number of
units at the same level of utility. The price of Pepsi and Coca Cola is almost
the same. The marginal rate of substitution is occurred here.
Law of Demand
Coca Cola being a normal good, if
there is an increase in income, the demand will increase and if there is
decrease in income, demand decreases.
Economies of Scope
The Coca Cola company not only
benefits from economies of scale but also from economies of scope. The
economies of scope play in the market when a company grows by diversifying the
scope of the production, by reducing the risk of business by competing
different sectors of market.
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