Solar Power Industry - Essay Example

The success of U.S oil production company, Shale, has caused various producers sleepless nights. GCC countries are greatly concerned with this ‘unhealthy’ trend that is hurting their economies badly. Augustine (2013, December 9) reports that many cities and countries in the GCC such as Doha, Qatar have undergone massive development due to high oil prices. This article piqued my interest as it focuses on the future and affects every country. Also, it spots various loopholes in the developing countries.

Further,it proposes various measures that the young citizens of various developing countries should put to task to ensure their respective countries are at par with global standards in various sectors such as technology, education, and the service industry in the future. In an effort to explore the on-surface effects, as well as the extended market effect, I will explore various microeconomic concepts such as the theory of the firms, consumer theory, and the demand and supply side of the market.

The ease with which new firms enter market imposes great threat to existing firms and the future of such industry (Perloff, 2011, p. 154). This can result to possible exit of other firms in the event a firm that enjoys great economies of scale engages in unhealthy business competition. Shale company successful positioning in the market due to high technology it employs in mining has made it increase its output with the current level of inputs. It experiences increase return to scale due to efficiency with which it conducts its operation.

Consequently, it can decide to lower the prices of its product and this will impact negatively on the future of other firm, and various positions they hold in the market. A single firm’s action in a competitive market affects other firms. The global oil price is expected to fall below $100 a