Monopolistic Competition Essay

1784 Words Oct 26th, 2015 8 Pages
Assignment 2: Operations Decisions
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Professor
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Aug 13, 2015

Low-calorie Frozen Food Industry
Low –calorie foods are those with 40 calories or less per serving. The low calorie frozen foods is the choice for a healthy and easy to cook meal. There are several choices of low calorie frozen, microwaveable food products available in the market nowadays (Creasy, 2015). This implies that the market structure is somewhere between a monopolistic and oligopolistic competition, leaning more towards monopolistic competition (Economicsonline.co.uk, 2015). The low-calorie frozen food products available in the market are relatively similar with slight differentiation amongst them.
Leading Competitors
The lifestyle of people has
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Moreover, one needs to have a clear picture of the potential economic growth offered in the industry. Statistics clearly show that between the years of 1983 to 1988, frozen foods have grown in popularity (BURROS, 2015).
To decide upon a market structure, the objective of growth inside a company is also equally important. Furthermore, a company needs to have a clear vision of what level of operation is it working on. These levels of operation can be targeting the local market or the global market depending on the company’s vision.
Another important factor is consumer behavior towards purchasing the product in question. In assessing consumer behavior of frozen food industry, we first account for our target customer. We assess the gender, age, education and other socio-economic factors that affect a consumer’s choice of food products. One must also be fully aware of healthy eating habits in order to purchase low-calorie frozen food products. Thus, it is absolutely vital that the prospective customer of our produce has the educational background and awareness regarding health.
Effectiveness of the Market Structure
An effective market structure is shown by the increase in demand of a certain product. According to economic theory, the demand of low-calorie frozen food is inelastic in nature. This means that an increase in the price of the low-calorie frozen food leads to the fall of the quantity demanded by less than proportionate amount. Furthermore, since…