₦airaland Forum

CsRockefeller:
You are referring to the profit maximisation or cost minimisation objective for the firm.

Remember, in a monopolistic competition, the firm can only influence either price or quantity and not both.

What many firms are trying to achieve right now is cost minimisation, in this scenario (mass market)

Here is the reason; purchasing power is still low amongst the vast populace and don't forget, those goods you mentioned up there are consumers goods not luxury goods where the few rich pay top premium.

I remember sometime ago, NDIC published a report saying that about less than a 1,000 Nigerian's have the largest share in Bank deposits (current and savings).

Hypothetically speaking, if I sell coca cola at N100, and the ratio of the rich to the middle class is 1 to 10, it would be easier to sell a packet of coca cola to 10 persons at N100 each to sum N1000 than to convince 1 man to buy a packet, and even if I persuade him, the multiplier effect may not be achieved.

For this reason, the law of Demand would not hold here (the lower the price the higher the quantity demanded) because the rich class loves to buy the goods no one is buying and the goods/products you listed up there don't strike as a luxury good/product. Therefore, the mass market strategy, would be the best to achieve.

To cite a practical example, Pepsi was once sold for N120, the masses withdrew, they had to bring it back to a N100 even with more quantity. Coke on the other hand couldn't cope, so they had to reduce the quantity to keep up with the same price. They both seek the same objective but now, capital is speaking, and I believe 7up Co. has d edge over NBC.

The Economy eventually decides which is the best method to adopt.

Enrypech:
From Enugu, holla!
Something for you

didi95:
pls who wrote in IMT centre 2 in Enugu? any invite yet?

geraldmezi:
I rep Ede-0balla''
such crap don't happen here.