Economics of Satellite Dish Providers

Essay by fuzzygarfieldUniversity, Master'sA+, July 2006

download word file, 12 pages ( 20 KB ) 5.0

Executive Summary

The satellite dish industry follows the laws of supply and demand. Demand is associated with product pricing. Satellite dishes are considered to be price elastic because the demand varies with price. The following items will be discussed in terms of demand and product pricing.

* Utility

* The Law of Diminishing Marginal Utility

* Determinants of Demand

* Substitutes and Complements

* Elasticity

Costs of production are a basis for product pricing. A company cannot make a profit by selling a product below production costs. Costs also affect the supply of a given product or service. The following will be discussed in relation to costs and supply.

* Costs

* The Law of Diminishing Returns

* Determinants of Supply

The market structure in which a firm operates affects both price and non-price competition. The following components of market structure will be discussed.

* Defining Characteristics

* Implications

* Non-price Strategies

Economic forecasts affect all determinants of supply and demand.

Being an elastic product, satellite dishes are vulnerable to economic forecasts. The following will be discussed about economic forecasts.

* Supply Indicator

* Demand Indicator

* Implications

Table of Contents

Product Pricing....................................................................5-8

Costs.................................................................................8-11

Market Structure...................................................................11-15

Economic Forecast................................................................15-16

References..........................................................................17

Product Pricing

Demand is a curve that shows the amount of a product consumers are willing to purchase at a variety of different prices during a specific period of time. There is an inverse relationship between product price and demand. All else equal, as price falls, the quantity demanded increase, and as price rises, the quantity demanded decreases (McConnell, 40). All else equal is important in this statement. There are several determinants of demand other than price which are discussed below.

Utility

Utility is a measure of satisfaction or happiness from buying goods or services. The more utility there is the...