Essay: Exploitation of Customers

The sale price per blood count is $300 while its production cost is $20 implying that a gross profit of $280 is made per blood count. This is exploitation of the customers since the profits are so high.

With free entry to the industry, competition will be triggered and it will follow that firms will be forced to reduce prices in order to be competitive. This will be a great benefit to the customers since they will have to get the same quality services at lower costs. With increased firms in the industry, supply is high while demand remains the same and this means that the equilibrium price falls. The same quantity of services will be bought at lower prices (Dewar, 2010).

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