Q.:- What are the ways in which Ravi’s small production unit was affected by rising competition?
Ravi’s small production unit was affected by rising competition in the following ways
(a) 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.
(b) His production and sales have also reduced due to his capacitors being costlier than the imported variety, due to the removal of import duties on imported capacitors.
(c) 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.