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The environment in which the sales of computers operate has characteristics of perfectly competitive and monopolistic markets. Due to the enormous variety of price ranges, performance capabilities, and other factors, hundreds of firms are able to compete and observe profits. However, it is also undeniable that a select group of companies enjoys a monopoly over certain categories of computers or even within certain price ranges. As a result, entry into the market is not especially difficult, but the ability to become a leader within the industry is reserved only for larger firms. Overall, the market is more reflective of the qualities found in perfect competition. This is primarily because it is swayed by the supply and demand of either resource necessary to create computers for customer needs and income levels. Brand identity is also integral in persuading customer purchases.
Fixed inputs refer to elements that are not decreased or increased by output levels. For computer firms, this includes employee labor and necessary equipment. All resources associated with brand marketing and identity are also likely to be relatively similar despite output but may increase if demand presents a decrease. As this can cause lower sales and profits, firms may engage in advertising and marketing projects to highlight the advantages of their computers, whether this is affordability, performance capabilities, support, or other factors. Variable inputs are often influenced by demands and can include raw materials or vital parts that the company does not produce themselves. The market for computers is susceptible to changes in the short run as resources necessary for computers may be impacted by external sources, which has been visible in the silicon shortage of recent years (Baraniuk, 2021). Overall, the influence has not been drastic but points to potential future issues as a result of supply changes.
Reference
Baraniuk, C. (2021). Why is there a chip shortage? BBC News. Web.
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