For any general profit-maximizing firm with market power (i.e., a price-setting firm, such as Microsoft, Toyota, or Starbucks), why do we NOT expect to see on an ongoing basis shortages of goods or services provided by these firms? Explain briefly.© BrainMass Inc. brainmass.com March 21, 2019, 10:03 pm ad1c9bdddf
Shortage of goods in a profit maximizing firm is very rare because these firms have put in place systems that are very efficient. After all, a profit maximizing firm wants to have products ready when customers need them and at the time the products are need. In short, they have a very well designed just-in-time systems. Besides, these companies ...
This solution gives reasons why profit-maximizing firms such as Microsoft, Toyota, and Starbucks rarely short supply of goods to markets.