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In consumer theory, a consumer's preferences are called homothetic if they can be represented by a utility function which is homogeneous of degree 1. [1]: 146 For example, in an economy with two goods ,, homothetic preferences can be represented by a utility function that has the following property: for every >:
Example: Agricultural products which have many buyers and sellers, selling homogeneous goods where the price is determined by the demand and supply of the market and not individual firms. In the short run, a firm in a perfectly competitive market may gain profits or loss, but in the long run, due to the entry and exit of new firms, price will ...
As mentioned above, the perfect competition model, if interpreted as applying also to short-period or very-short-period behaviour, is approximated only by markets of homogeneous products produced and purchased by very many sellers and buyers, usually organized markets for agricultural products or raw materials.
The original H–O model assumed that the only difference between countries was the relative abundances of labour and capital. The original Heckscher–Ohlin model contained two countries, and had two commodities that could be produced. Since there are two (homogeneous) factors of production this model is sometimes called the "2×2×2 model".
In these alternative models of oligopoly, a small number of firms earn positive profits by charging prices above cost. Suppose two firms, A and B, sell a homogeneous commodity, each with the same cost of production and distribution, so that customers choose the product solely on the basis of price. It follows that demand is infinitely price ...
In economics and marketing, product differentiation (or simply differentiation) is the process of distinguishing a product or service from others to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as from a firm's other products.
Commodities can also be mass-produced unspecialized products such as chemicals and computer memory. Popular commodities include crude oil, corn, gold and Bitcoin. Other definitions of commodity include something useful or valued [4] and an alternative term for an economic good or service available for purchase in the market. [5]
Homogeneity and heterogeneity; only ' b ' is homogeneous Homogeneity and heterogeneity are concepts relating to the uniformity of a substance, process or image.A homogeneous feature is uniform in composition or character (i.e., color, shape, size, weight, height, distribution, texture, language, income, disease, temperature, radioactivity, architectural design, etc.); one that is heterogeneous ...