1. Market:
Mobile Industry is monopolistic competition.
Number of firms present in the market is high. Entry is restricted and products are differentiated.
2.Price Discrimination:
Mobile market has segment based price discrimination. If we take example of Samsung, Samsung manufacturers a variety of products according to the needs of the customers and price is also fixed keeping in mind those segments of consumers.
3. Economies of Scale:
If we take example of Xiaomi, then we can say that it uses the concept of economies of scale to reduce its prices. Bulk production helps Xiaomi to reduce its prices.
4. Income:
People buy smartphones keeping in mind their income also. People focuses on their income and buy product according to their budget.
5. Rational people think at margin:
People do a cost benefit analysis before buying anything. This is the case with smartphones also. They look at the price that they are paying and the benefits that they are getting out of it.
6. Elasticity :
Products in this sector is high because of lots of substitutes available. A change in price of product will change the quantity demanded.
7. Taste and Preferences :
Consumers choose mobile phones according to their taste and preferences. Some people focus on camera, some focuse on processor. So people make decision according to that.
Mobile Industry is monopolistic competition.
Number of firms present in the market is high. Entry is restricted and products are differentiated.
2.Price Discrimination:
Mobile market has segment based price discrimination. If we take example of Samsung, Samsung manufacturers a variety of products according to the needs of the customers and price is also fixed keeping in mind those segments of consumers.
3. Economies of Scale:
If we take example of Xiaomi, then we can say that it uses the concept of economies of scale to reduce its prices. Bulk production helps Xiaomi to reduce its prices.
4. Income:
People buy smartphones keeping in mind their income also. People focuses on their income and buy product according to their budget.
5. Rational people think at margin:
People do a cost benefit analysis before buying anything. This is the case with smartphones also. They look at the price that they are paying and the benefits that they are getting out of it.
6. Elasticity :
Products in this sector is high because of lots of substitutes available. A change in price of product will change the quantity demanded.
7. Taste and Preferences :
Consumers choose mobile phones according to their taste and preferences. Some people focus on camera, some focuse on processor. So people make decision according to that.
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