Differentiating Between Market Structures Of Wal Mart

1498 Words Nov 4th, 2015 6 Pages
Differentiating between market structures
The structure of a market is defined by the number of firms in the market, the existence or otherwise of barriers to entry of new firms, and the interdependence among firms in determining pricing and output to maximize profits. Retail sales are indicators of microeconomic conditions presented in a given area at a particular place in time. Since Sam Walton opened his first Wal-Mart store, Wal-Mart has been making ripples throughout the micro economies of America. Wal-Mart’s market structure is typical of most of our nation’s largest corporations in that they are an oligopoly (Brown, 2010). According to Colander (2010), “An oligopoly is a market structure in which there are only a few firms and these firms explicitly take other firms’ likely response into account when making decisions.” Furthermore, given that Oligopolistic firms are few, they are interdependent of each other and can either be collusive or no collusive. It is this interdependence amongst the firms that distinguish them as an oligopoly vice a competitive monopoly. Target and Costco are considered to be Wal-Mart’s competition because they offer similar products and services to their customers. Through personal experience I decided to compare the quality of the item, to the price we are willing to pay for that item, and we usually purchase that item from the firm that offers us the best quality for the price and shopping experience. A byproduct of this competition is a…
Open Document