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plete economies of scale. Economies of scale are the cost advantages that a business obtains due to expansion. They are factors that cause a producer’s average cost per unit to fall as scale is increased. Economies of scale are a long run concept and refer to reductions in unit cost as the size of a facility, or scale, increases.

 

I have collected a series of data of certain products inside the store Woolworths from three major cities in Australia. Selecting nine products randomly, noting down their prices and observing each product in three Woolworth’s supermarkets in the area of that city. My hypothesis is Woolworth’s prices should consistently stay the same throughout all retail stores because of competition rivalry Cole’s and its advertising say it has the lowest prices every day.

 

I also conducted a Survey outside of the Woolworths Stores to consumers who were passing by and entering the store in each location, I was collecting my results for; the reason for this was to get an idea, why the consumers were shopping at this Supermarket. To get an Idea of what the distribution of Income was between the different areas. This was also to see if Income distribution had any effect on price discrimination.

 

I firstly collected my results in Sydney, I chose three Woolworths locations; Kellyville, which is a very high-suburbanized area, Surrey Hills, is located near the heart of Sydney, which is a very urbanized city area, and Penrith near the rural area, which is considered a lower income area.

 

Kellyville is generally considered to consist of mainly middle class income families, who can also be characterised as either upper, mid or lower middle class income earners according to the survey results. Surrey hills is the inner city is considered to be a higher income area with 42% of households earning AU$2000 or more a week. With an increase of price within supermarkets the number of consumers still willing to shop at these supermarkets does decrease but the percentage decrease is a lot lower than the hills district. Penrith the western suburbs are considered a lower income earning area with an average weekly income of around AU$1,087. However while this is the same for all three locations the difference is the percentage change in the number of consumers willing to keep shopping at these supermarkets decreases by a higher rate when the price is increased slightly.

 

To justify this, a simple supply and demand diagram can show the effect if the supermarkets were reducing their prices.

 

For reasons why the supermarket prices will drop; is because on an increase of supply which leads to an outwards shift lowering the price caused by the Lower costs of production meaning that Woolworths can supply more at each price. Cost savings, can then be passed through the supply chain to wholesalers and retailers and may result in lower market prices for co本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。