Business Analysis : Perfect Competition

You have been hired as a consultant by your local mayor to look at the various market structures. Your role is to provide analysis and answers to these important questions that will help the mayor understand the structures of many of the businesses in his city:

There are four types of market structures: Monopolistic Competition, Monopoly, Oligopoly, and Perfect Competition. Monopolistic Competition is also known as competitive market. In this market structure, there are a large number of firms that produce similar but somewhat differentiated products for the same target customers. The market share is also divided among large number of firms making it difficult for one firm to become the market leader. On the other hand, Monopoly is a type of market structure in which only one firm controls the whole industry. There are strict barriers to entry for new firms due to governmental restrictions or the monopolistic power of the firm itself. In Oligopoly, the whole industry is dominated by a few large scale firms that set prices, introduce innovative products, and use heavy campaigns to attract buyers. All other small scale firms follow the changing market patterns set by these oligopolistic firms. Lastly, perfect competition is a market structure in which there are a larger number of firms that produce similar as well as differentiated products for

Guided Response: Review the discussion board posts of your classmates. Analyze the difference between market structures. Compare your response to those of your classmates. Respond to at least two of your classmates. Discuss the way profits vary based on market structure.

A market is defined as an institution that brings together buyers (demanders) and sellers (suppliers) of a particular good or service. A Market structure is the relationship among the buyers and sellers of a market and how prices are determined through outside influences. There are four different types of market structures. Two on opposite extremes, and two comfortably in the middle. On one end is perfect competition, which acts as a starting point in price and output determination. Pure competition is when a large number of firms sell a standardized product, entry and exit is very easy, and an individual firm cannot control the price. On the other extreme end is Pure monopoly. A monopoly is characterized by an absence of competition, which will often allow one seller to control the market. A Pure monopoly is essentially the same thing, but also includes near impossible entry and no substitute goods. Two more common market structures are monopolistic competition and oligopoly. Monopolistic competition has a large number of sellers producing different products, while an oligopoly has only a few number of sellers producing similar products. All in all pure competition, pure monopoly, monopolistic competition, and oligopoly are all unique market structures with differing characteristics, but have one main goal, profit maximization.

The video discusses the four types of markets: perfect competition, monopolistic competition, oligopoly, and monopoly. These different markets are all over & were established for the selling goods to consumers. Currently some of these markets might not be used anymore. By reviewing these markets will give you a better comprehension of each one.

At one end is perfect competition where there are very many firms competing against each other. Every firm is so tiny in relation to the entire trade that has no power to manipulate price. It is a ‘price taker’. At the other end is monopoly, where there is just a single firm in the industry, and for this reason no competition from inside the industry.

The major market structures that impact our current economy are perfect competition, monopolistic competition, oligopoly, and monopoly.

An oligopoly is a market situation (or industry) in which there are few sellers. These sellers are

An oligopoly describes a market situation in which there are limited or few sellers. Each seller knows that the other seller or sellers will react to its changes in prices and also quantities. This can cause a type of chain reaction in a market situation. In the world market there are oligopolies in steel production, automobiles, semi-conductor manufacturing, cigarettes, cereals, and also in telecommunications.

There are different classifications of markets and the structure of a business determines which classification it will fall into. Markets are divided according to the composition of the business and what it provides to the specific market. Business composition is determined by the structure of market characteristics, and this helps determine level and area of competition. The characteristics in a market with the most concentration focus on number of purchasers and retailers, level in which a product has a substitute, price, entry and exit ease, and the level of mutual

Oligopoly Oligopoly is a market structure in which the number of sellers is small. Oligopoly requires strategic thinking, unlike perfect competition, monopoly, and monopolistic competition. • Under perfect competition, monopoly, and monopolistic competition, a seller faces a well defined demand curve for its output, and should choose the quantity where MR=MC. The seller does not worry about how other sellers will react, because either the seller is negligibly small, or already a monopoly. Under oligopoly, a seller is big enough to affect the market. You must respond to your rivals’ choices, but your rivals are responding to your choices.

When a product is produced, the company that produces that particular product falls into one of four categories: pure competition, monopolistic competition, oligopoly, and monopoly. Depending on how many companies are producing a product determines what market structure the company is labeled. Each category determines how a company will use pricing and non-pricing to advance in the economy. The United States economic market is competitive with various buyers and sellers, and each company is constantly looking for ways to be better than its neighbor. The following examples of each category will show different companies and how they use pricing and non-pricing to advance to

•Monopolistic competition- When an industry contains many rival firms, each of which has a comparable but at least slightly different product. Restaurants, are an example, all serve food but of different types of food and in different sites. Manufacture costs are above what could be attained if firms sold equal products, but consumers have an advantage from the variety.

In this paper, we will discuss the four market structures of Monopoly, Oligopoly, Monopolistic Competition and Pure Competition. We have identified four companies that operate in each of these market structures: Salt River Project, The Coca Cola Company, Russ 's Market, and Columbia House. In each market structure we will describe the pricing and non-pricing strategies of the companies operating in that market. We will also examine Quasar, a notebook computer company. They entered the market with a new product and we will explain the progress from one market segment to the next as the lifecycle of the product changes and the number of

When understanding the different types f structures it is important to know the different types of markets that there are. Understanding barriers, buyers and sellers with knowing the market share and competition is important to understand what barriers are occurring in the market. The different market structures are Monopoly, Oligopoly, Monopolistic Competition, and Perfect Competition.