Question

7) Define industry. 7b. Discuss the life cycle of industry development in the United States, for the Cell phone industry. 7c. What does new firm entry do to a competitive industry? Discuss.

Answer 1

Dear Student,

Below are the answer to your question

Introduction

The structure of the industry affects the rules of competition, and thus the necessary strategy for survival and development. Changes in industrial structure, demand and technology requirements through the industry life cycle have important implications for sources of competitive advantage in every phase.

Abstract

7A) An industry is a sector that produces goods or related services within an economy. The major source of revenue of a group or company is an indicator of what industry it should be classified in.

he definition of an industry is any large-scale business activity or a type of productive manufacture or trade. An example of industry is the coal mining business.

here are four types of industry. These are primary, secondary, tertiary and quaternary. Primary industry involves getting raw materials e.g. mining, farming and fishing.

7B) Discuss the life cycle of industry development in the United States,for sale phone industry

The distinct stages of an industry life cycle are: introduction, growth, maturity, and decline. Sales typically begin slowly at the introduction phase, then take off rapidly during the growth phase. After leveling out at maturity, sales then begin a gradual decline.

Mobile phones look to have the classic product life cycle of introduction, growth and maturity.

n the years 1998 to 2000, there is suddenly an explosion as the rate of mobile phone subscription increases from 25% to 74%. Mobile phones went from being a minority user group to an essential of life.

Saturation / Maturity

In the late 2000s, mobile phones reached to even the most technophobic elements of society. (e.g. my mother). It was a bad day when she learnt how to send text messages saying ‘what are you up to?’

By 2009, it looks like we have reached the peak and market saturation, with a subscription rate constant at 130%

Summary

I think it is unlikely. In a way, we have already seen a decline of the old traditional mobile phone – which has been replaced by the new smartphone. Interestingly, the Smartphone is causing a decline in digital camera sales. – As people don’t need both a camera and a phone. But, because the mobile phone has evolved, it is hard to see a decline in mobile phone subscriptions for the foreseeable future

7C) What does new firm entry do to a competitive industry

Entry of many new firms causes the market supply curve to shift to the right. As the supply curve shifts to the right, the market price starts decreasing, and with that, economic profits fall for new and existing firms

Over the long-run, if firms in a perfectly competitive market are earning positive economic profits, more firms will enter the market, which will shift the supply curve to the right. As the supply curve shifts to the right, the equilibrium price will go down

If you like the answer, Please up vote

Thank You !!