Soft Drinks Essay

2971 words - 12 pages

Introduction of soft drink industry:
Soft drinks introduced in seventeenth century. These were known as non carbonated soft drinks and prepared by mixing honey and lemon with water and this soft drink was sold in Paris in small plastic cups. Later on it was produced in large scale John Mathew invented an equipment which is capable of producing carbonated water in large scale.
The first flavoured drink was prepared by Doctor Philip Sing Physic in 1807. Later on it was liked as health drink and liked by customers as well and ordered to be carried at home. After this demanded by peoples then it leads to manufacturing industries of bottle plants. This was an interesting phenomenon that soft ...view middle of the document...

Micro economics is concerned with how the individual consumer distributes his income among various products and services so as to maximise utility. Micro economics seeks to explain what quantity of different factors of production should be used in producing a commodity and how to minimise the cost of production. A market is a set of buyers and sellers, commonly referred to as agents, who through their interaction, both real and potential, determine the price of a good or a set of goods. The concept of a market structure is therefore understood as those characteristics of a market that influence the behaviour and results of the firms working in that market.

Market can be classified into the following:
* Perfect competition- Under perfect competition there are many sellers and buyers and demand and supply reflects by price. New firms can easily enter into the market and generating competition.
* Imperfect competition- A type of market which does not follow the rules of perfect competition. Forms of market under imperfect competition are monolpoly, oligopoly, monopolistic competition, monopsony, oligopsony.
* Monopoly- In this market structure there is only one firm in the product which determines the price and affects the demand and supply. Consumers have no choice but they have to purchase from only this firm.
* Oligopoly- oligopoly is a market in which small group of firms control the market.
* Monopolistic competition- A type of market where all firms produce similar yet not perfectly substitutable products. All firms are profit maximizers.
* Monopsony- A market similar to monopoly but there are large buyer not seller controls a large portion of market and leads to the prices down.
* Oligopsony- Again it is the market which is similar to oligopoly but there are only few large buyers for a product or a service.

Perfect competition

This type of market is not exist in the real world. Similar to this market structure there is only agriculture market which is kind of similar to this market structure. In perfect competition there are large number of sellers in the market with no single seller able to determine price. The product of each competitive firm is homogeneous.Entry into the this market is free and very easy. New firms can enter into the market and there is free exit also. Government intervention is not exist there so that there are no government rules and regulations. There are no participation of government. It is never really existed.
Main features of perfect competition are:
* Many sellers and buyers
* Homogenous product
* Zero advertisement cost
* Free entry and exit
* Perfect knowledge
* No government intervention
* No transportation cost

If this market is so rare, then why are we bothering to study it? Perfect competition is a benchmark --it is the standard by which all other markets are judged. We will see that markets work most efficiently under...

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