Question

2. Explain why it is important for producers to conduct market research. Give at least one example of a type of market research that producers conduct. Explain the kind of information this research provides.

Answer 1

- Demographic research: find out which age groups like your product best. The information that results from this research can be used to know at which people it's best to direct your selling efforts. 
- Geographic research: find out at what locations your product is more in demand. Cities? Farmland? Near schools? New York? The information that results from this research can be used to determine the best places to go and try to sell your product. 
Utility measures the preferences people have with respect to different goods and servies. Another way of putting this is that utility tells you how high people value certain goods and services, and how much satisfaction they get from consuming them. Utility differs between individuals because people have different preferences. Some may derive much utility/satisfaction from consuming coca cola, while others may derive more utility from consuming water. 
Consumer behavior is simply determined by the utility people derive from the goods and services they consume. Knowledge of that utility explains what someone is likely to consume, as he or she will consume those products that provide him or her the most utility 
- The market of a specific good or service is dominated by a small number of producers. 
- In an oligopoly it is often harder for new producers to enter the market due to high barriers. These include technological barriers (the knowledge of producing is hard to understand/find (e.g. the airplane industry)), financial barriers (producing requires a lot of (starting) capital), patents, limited access to essential resources, or the fact that the costs of producing oligopoly-dominated products tends to decrease when production increases (this makes it hard for small new companies to enter the market). 
- Is that people often stick to what they know. So increased competition may not be able to overcome that loyalty; the new producers would simply lose money and go bankrupt. 
- Another reason might be that when you only have 3 or 4 competitors, you as a producer are more able to increase the price when you know all your competitors will do the same. 
- A high rating means people will need less convincing by advertising that your product is worth consuming. 
- I'm guessing it means that greater circulation of a particular product means people are more familiar with it and so less advertising is required in order to sell it.