Consumer Behaviour and Market Constraints on the Enterprise
At the end of Chapter 5 we left enterprises confronting the problem that they cannot charge any mark-up they wish to without this affecting the quantity which they can sell: price and quantity sold are interdependent, so this chapter is about the market constraints which consumer (or customer) behaviour imposes on enterprises. This constraint can be expressed in a (downward-sloping) demand curve, which effectively limits the mark-up by forcing on the enterprise a choice between price charged (mark-up) and quantity sold: the higher the one, the lower the other.
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