Question

Discuss the differences between the two characteristics of the optimal conditions to the general competitive market conditions.

Answer 1

The Business Economy always lies with the running of competitive markets spreading all over the global transactions of goods and services in all the countries. The nature of market conditions decides the healthy environment of all demand and supply factors in which methods of marketing forecasted before structuring the mapping of the sales of all the products. Let us discuss below the differences between the two characteristics of the optimal conditions to the general competitive market conditions.

1) Revenue:- There are two kinds of generating profits vested with marketing conditions. The economic factors like Inflation, purchasing power of all the buyers and existing reputation of the products determines the excess demand or less demand of the products which can also control or increase the cost of production. The condition of accruing revenue is the deciding focus in the competitive markets. But it can also optimize the prevailing market forces when the Total cost of production equals the Total revenue of the production in its equilibrium level.

2) Optimizing marginal cost of production:- The competitive markets has different producers with different products. They face the rivalry competition towards demand and the supply of all the products which have unique customers who have tastes and preference to buy them. At last, the benefit of the goods and services depends only by its reputation without making overhead cost on marginal cost of producing every output, when the quantity of supply exceeds the demand of the goods. This, in turn, reduces and optimizes the marginal cost of production.         

Thus, from the above facts, we can infer the differences of two distinct characteristic features coupled with the nature of competitive market conditions.