Microeconomics Essay Example | Topics and Well Written Essays - 750 words - 7

Microeconomics - Essay Example For instance, firms in the agricultural sector experience perfect competition. A firm that deals with supplying eggs may make a complete loss due to lack of good production. This does not make the firm go out of production but experience a loss (Francis 56). Firms that experience perfect competition often look at their competitors as a very small competitor in comparison to the total market. Though each company produces the same products, the aim is to provide a marketing edge to attain the customers (Krama, Bartram and Cieri 45). The problem comes as the products and services provided are of the same quantity and quality. By providing a competitive edge, companies are able to attract and maintain customers. A firm can go into a loss if it offers no competitive edge such as customer care service, after sale services, poor communication and in adequate advertising (Kern 78). Proper customer care services acts as a major consumer attraction. Firms under the same business line may suffer a loss but remain in business due to poor customer care services. Customers will prefer to access the same products or services from a different firm. The firm that does not offer proper customer care services ends up making sales only if the other firms are closed or their products supply is low. After sale services is another reason why firms can continue to make losses in a perfect competitive market. Firms may be offering the same products but others gain a competitive advantage by providing their customers with after sale services. A firm providing customers with eggs may offer an after sale service of providing free delivery of the products to the clients (Jain and Haley 98). Communication to the customers comes as an important aspect of ensuring competitive advantage. A firm in a perfect competition market should ensure to communicate properly to the clients before pushing for sales. Signs of the location of the business have to be communicated to the