Miracle Creation Enterprise Case Study

Miracle creations enterprise’– partnership between sellers sold plastic balls for 7 days in the informal economy. The enterprise had seed capital of Rs 100, the discussions held before starting its business tried to find the market for an innocuous commodity. In Crawford market- the place from where the commodity was procured, the oligopolistic sellers there followed price rigidity. So, the enterprise inspite of having inelastic demand for plastic balls (for 7 days) the enterprise has to pay a fixed price. While discussing, the enterprise realized that for higher sales it needs to tweak the commodity and add value or utility to the commodity. The enterprise decided 7 locations as per perception where they would find ‘targeted consumers’ who would have utility for the product.The objectives of the enterprise were as follows:
1) To understand the working of informal economy.
2) To check the elasticity of the different types of the commodity using product differentiation.
Rational for the above objectives: The enterprise wanted to know how the sale of innocuous commodity serves as the means of livelihood of majority of people working in the informal sector.The enterprise by checking the elasticity (of various type of plastic balls) using product differentiation aimed to price a particular variation
It shows the seller in this market mainly have low seed capital, the enterprise in this sector have low or no sunk capital. This reflects the credit system is getting financialised; this has adverse effect on livelihood of workers whose principle behind working in informal sector is survival. The low seed capital and non-availability of loan entails them into high opportunity cost. This acts like a vicious cycle in their life enabling them just to survive traped under