The disadvantages of perfect competition are no scope for economies of scale, lack of product differentiation, reduced research and development expenditures, reduced incentive to develop new technology and the potential for market failure. Perfect competition is largely a theoretical concept.Know More
Perfect competition is an economic market structure characterized by numerous small firms that have no individual control over price, no barriers to entry or exit, perfect information among market participants and the absence of product differentiation. Markets for agricultural products and commodities are the closest real world examples of perfect competition.
Because a perfectly competitive market is comprised of numerous small firms, economies of scale that benefit larger firms are nonexistent. A firm that grew much larger than its competitors would incur fixed costs that would make it financially unfeasible. Perfectly competitive markets also result in dull, homogeneous products because a seller has no incentive to differentiate his product, as everyone is selling the same thing: rice is rice, and iron is iron. Homogeneity reduces the incentive to invest in research and development, as a firm is unwilling to invest resources in activities that, because of perfect knowledge, will benefit the entire industry. Finally, absent government intervention, perfectly competitive markets are prone to market failure when impacted by externalities such as bad weather or supply shocks.Learn more about Business Resources
Customer relationship management (CRM) helps businesses build customer loyalty, but it can be a costly resource. Marketing Weekly says that when used properly, CRM is invaluable to businesses, but without proper training the software can cause internal issues.Full Answer >
Primary disadvantages of single sourcing include supplier control in bargaining, limited opportunities for the lowest price and limited product diversity. Additionally, if the single source goes out of business, it can leave the company in a bind, especially if there are delays in lining up new suppliers.Full Answer >
International trade lowers the cost of products through competitive advantages, but it can lead to harm for communities and nations. Workers in developed nations are sometimes replaced by counterpart in developing nations. Work conditions in developing nations can be exploitative.Full Answer >
An advantage is that primary data is information the researcher has collected and worked with personally. It relates directly to that person's research or study. A disadvantage of primary data is that it is expensive to collect the data, and it often takes a long time to process the information.Full Answer >