A Swiss multinational food manufacturer increased prices for its products by an average of 8% in 2022. It increased its prices in the USA by 11.6%. This multinational company (MNC) is one of the world's oldest MNCs. It started as a small firm but has grown over the last 160 years. Over this period, its decisions have always been influenced by opportunity cost.
Discuss whether or not consumers would benefit from an increase in the number of small firms in an industry.
What would make the existence of a monopoly market more likely?
consumers prefer a variety of choice in products
significant economies of scale can be achieved
there are low barriers to entry and exit for firms
there are no restrictions on international trade
Street vendors mostly operate outside of the formal economy to avoid government regulation. However, many are now entering the formal economy. This has led to more government revenue, increased productivity and higher economic growth. Some governments plan to take measures to increase the number of firms in the economy.
Discuss whether or not an increase in the number of firms will benefit an economy.