Ifprofit loss is in effect with thefirms long-run Average Total Costthen the firm will have to cuttheir losses and exit the market.(Mankiw)One reason why most firms didbetter than others is because oftheir Average Total Cost beinglower than the price. They will beable to make the profit that isneeded for the firm to survive.Another reason is because the firmhas a strong marketing strategy.Marketing involves the gathering ofuseful data: what the consumerwants. When the data gathered andstudied the information providedwill let the firm know what goodsto produce or what type ofadvertising to use. Advertiserswill make it seem that the firm'sproduct is better that similarproducts. Consumers will be led tobelieve that the goods advertisedare better. Consumers will purchasethe goods that have a higher price,as long as the price is rational.Firms that have maximized marketingand advertising will be the onesthat make profit. Some retailerssuch as Sears, whose sales dropped0.9%(Domestic) due to disappointingsales in apparel (Chandler)Comparing with Eddie Bauer whosesales rose 5% since 1998. Thereason why Sears's sales droppedand Eddie Bauer sales rose isbecause of a strong advertisementstrategy. Sears never mentionedadvertisement and Eddie Bauer has astrong advertisement strategyletting consumers purchase theirgoods over the Internet....
