Answer:
(a) Ravi's
small production unit was affected by rising competition in the following ways
(i) His customers have changed their
product, as they are now manufacturing TV sets for the
MNC brands, who do not use the capacitors produced by Ravi's unit.
(ii) His production and sales have also reduced due to his
capacitors being cosdier than the imported variety, due to the removal of
import duties on imported capacitors.
(iii) He is going into loss due to not recovering his costs
with such a small amount of production.
He may even have to close down his unit like his friends
have done.
(b) Ravi should either improve the technology of his manufacturing
process to compete with the imported products or try to manufacture any other
product which does not have so much competition from imported products. In both
cases he will need to make some capital investment, for which he must approach
the concerned government agencies or the banks for necessary loans.
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