Market Structures

1479 Words6 Pages
Differentiating Between Market Structures ECO/365 April 13, 2015 Benjamin Zuckerman Differentiating Between Market Structures Coca-Cola Company is one of the world’s leading soft drinks manufacturers. Since its creation, the company has been growing constantly. Today Coca-Cola manufactures more than 500 brands of products sold in more than 200 countries all over the world. Coca-Cola’s main competitor is Pepsi. Therefore, the two companies make up a duopoly where only two companies dominate the market. Both companies sell soft drinks. They also sell homogeneous products so that they can be able to control the price in the market. Coca-Cola Company depends upon the demand curve to adjust the price of its products. Specifically, the…show more content…
Unlike the theoretical perfect competition market, Oligopolies exist in real life. A market structure that is dominated by two companies is known as a duopoly. An example of an oligopoly is the soft drinks market that is dominated by Coca-Cola and Pepsi (Zheng, 2013). Oligopolies can be categorized according to the type of product they produce. The products may be either homogeneous or differentiated. On the one hand, Homogeneous products are produced by a standardized or a pure oligopoly. On the other hand, a differentiated oligopoly produces different products (William & Allan, 2011). In a Monopolistic Competition market has a structure similar to that of a monopoly and a perfect competition. The market has a large number of sellers. The products being sold by the sellers are not similar. The products compose of goods and services that are of real or imagined characteristics different from those of other goods or services. This differentiation can take many forms. The packaging may be unique; the salespeople may be more persuasive; the services faster or the credit terms better (William & Allan, 2011). The price elasticity of demand shows the relationship that exists between the price of a product and the quantity demanded. The PED can also be used to calculate the effects of the change in product price on the amount of the product demanded. The rate at which a change in price affects the quantity demanded varies considerably. The PED coefficient
Open Document