Morgan Dodd Summary #3
For large companies such as Microsoft, Hewlett-Packard, and Nokia, a large 100-acre electronics manufacturing cluster is being built in southern India. This will allow these companies to purchase land for a quarter of the price of many surrounding areas. Many of these companies are from the United States which is a mixed economy. A mixed economy is an economic system in which both the state and private sector direct the economy. They also are what is known as a modified free enterprise system because the United States basis its economy on capitalism but the government plays some role in it in order to ensure there are no monopolies. India wants these companies to purchase land and produce products there because one of the proposed deals is that the companies will have to purchase a percentage of locally-manufactured technology products and components. They also will have to manufacture their products locally to continue trading with India. This makes local companies able to make a profit because they have to be purchased from. A profit is when the revenue gained from a business activity exceeds the expenses. India has a profit motive because they want to achieve some monetary gain in a transaction. One of the major draws to this opportunity is the fact that the government will ease tax burdens on companies that plan to invest $4.6 billion to manufacture electronics products. This is a type of government subsidy or an assistance to a business or economic sector for producers. Since many of these businesses will be fighting over the opportunity to build there, there is an increase in competition between businesses. Competition is the rivalry among sellers trying to achieve a goal such as increasing profits, market share, and sales volume.