Monopolistically Structured Jcaho (Joint Commission on Accreditation of Healthcare Organizations)
1096 WordsJun 11, 20105 Pages
Monopolistically structured JCAHO (Joint Commission on Accreditation of Healthcare Organizations) I chose the monopolistically structured JCAHO (Joint Commission on Accreditation of Healthcare Organizations). They are the only organization that determines whether hospitals or medical facilities are up to their standards enough to receive reimbursement from Medicare and Medicaid. “The Joint Commission is a monopoly because it has unique statutory protection in the USA and collects $113 million in annual revenue; it is the only organization in the USA of this nature” (Joint Commission Requirements, 2009). This revenue is mainly from the fees it charges US hospitals for evaluating their compliance with federal regulations.
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Because of the fewness of companies in this type of industry, which is typical of an oligopoly; they get to make their price. In the USA, the auto companies certainly do make their own price.
This oligopoly produces homogenous products, in this case automobiles; which again, fits the profile. They do produce many types of automobiles, but the product is still homogenous in the aspect that it is only automobiles that these competing companies are producing. As in a typical oligopoly, even though it is a homogenous product, automobiles, they are producing, they still rely on heavy advertising to play up the non-price competition between each companies’ products in order to boost sales.
As for cost structures for this industry, the fixed costs are going to consist of machinery and equipment in order to produce the automobiles. These fixed costs also serve as a barrier of entry into the industry; small firms will not be able to afford the fixed costs. For the variable costs, labor, materials, and advertising are going to be the main costs (Investopedia, 2009). These costs also change according to the output produced; whether the companies cut back on production or increase in production. These costs don’t serve so much as a barrier of entry into the industry, but in order to compete in this industry, an entering firm must come up with them on an extremely large scale.