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Market and Growth

The size of market determines the growth and diversification of a firm. Groaning demand for Varity of products and service often induces the firm to diversify into new and newer areas; In fact, growing markets indicated the profitability of investment. Profits guide investment decision. Inducement to investment by the six f market. If a market is growing market then it creates a lot of opportunities for further inverstment, inducing and facilitating further production. Thus, a growing market generates what economists call “some sort of external economies” so that simultaneous investment in complimentary projects is facilitated as one market supports the other market. The growth economists often quote the example of shoe production to make a pointed reference to “balanced growth” of an economy.

The shoe-market are too wear shoes, the economists advise that it should start manufacturing shoes such that in and around the shoe factory, the suppliers of inputs for the shoe factory, when settled as subsidiaries and ancillaries may start demanding (warning) the shoes. To sum up, market is a determinant not only of micro-level business growth, but also of macro-level national economic growth.