The Primary Market Structures And Marketing Efforts, And The Principal Agent Problem

In a perfectly competitive market each firm is a “Price Taker” , i.e. the prices and wages are determined by the market and the firm is so small relative to the size of the market that they can have no influence over the market price. For a market to be

There are several different market structures in which organisations can operate. The type of structure will influence a company’s behaviour and the level of profits it can generate. The structure of a market refers to the number of businesses in a market, their market shares and other features which affect the level of competition in the market. Structures are classified in term of the presence or absence of competition. When there is no competition, the market is said to be concentrated. A scale from perfect competition to monopoly can be found below.

Perfect competition referred as “pure competition,” it’s a type of market structure where there are many buyers and sellers. As a result, if the price of the good or the service is too high or the quality did not meet their expectation, they would have many substitutes. Fontinelle stated that this kind of market structure has to meet 5 criteria; sell similar products making the consumer has more choices, product price could not be controlled by the companies, have small market share, each company would provide information about the product that they are selling and the price that is going to be charged for the buyers, and freedom of entry and exit should be the characterization of the industry (Fontinelle).

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

Monopolistic you can say “in reality, the closest to perfect competition is monopolistic competition where part of productive and allocative inefficiency is traded for variety and product differentiation” (Papatheodorou, 2006, pg.224). In a monopolistic competition is firm where a market situation with a relatively large number of sellers offering similar but not identical products. Certain examples of monopolistic competition are fast food companies. Another example of monopolistic competition is clothing stores. For a lot of firms each has a small percentage of the total market.Differentiated products are a variety of the product makes monopolistic

What are the characteristics of a market and why are they so important? Simply, the characteristics that define a market are the market structure. The market structure is comprised of features that best describe the goods or services of a market along with the organizational or competitive characteristics (What is Economics?). Market structure can also define the number of companies that exist within a market, producing the same products or providing the same services. The market structure bares great influence on the actions and reactions of firms operating within the market, it also bares great significance on the way a firm will market and price the available products and services. Market structure is also a key component for a company

The perfect market structure is yet of course a perfect competition since it brings out the competitive benefits to the business such as countless of producers and consumers, identical products with no differentiation, low barriers to entry and a perfectly flexible pricing of products and services.

Market structure is defined as the particular environment of a firm, the characteristics of which influence the firm’s pricing and output decisions. There are four theories of market structure. These theories are:

Finding the suitable market structure can a significant factor in the way business will succeed or fail. The interconnected characteristics of a market, the number of buyers and sellers, level and forms of competition among them, extent of product differentiation, and ease of entry into and exit from the market called market structure (BusinessDictionary.com, 2014). There are five different types of market structure: Perfect competition, Oligopoly, Monopoly, Monopolistic Competition and Monopsony.

There are four types of nature of markets, which is monopoly, monopolistic, perfect competition and oligopoly.

Market structure from an economics perspective is defined as the characteristics of the market that impacts the behavior or way firms operate, which economists use to determine the nature of competition, and pricing tactics of businesses in the market. Within a market, the market structures are distinguished by key features, including the number of sellers, homogeneous or differentiated goods or services produced, pricing power, level of competition, barriers to entering or exit the markets, efficiency, and profits. The interaction and differences among these features resulted in four market structures of competition: perfect competition, monopolistic competition, oligopoly, and monopoly. Economist assembled the four market structures into two groups; perfectly competitive market and imperfectly competitive market, which are vastly distinct when it come to the different market competitions that need to be satisfied.

In this research essay, the key characteristic of four elemental market structures (i.e. monopoly, oligopoly, perfect competition or monopolistic competition) and their derivatives (i.e. differentiated oligopoly were identified and discussed. Meanwhile other doubts were addressed and being attended to.

Market Structures are classified in term of the presence or absence of competition. When competition is absent, the market is said to be concentrated. There is a spectrum, from perfect competition to pure monopoly.

Market Structures are determined by the types of firms that are in them. Different firms have different characteristics that make them ideal for different structures. Several factors come into play n determining which market structure a firm belongs to; a firm without competition and can determine prices and output is automatically in the monopoly market structure. Smaller, multiple and similar firms are in a perfectly competitive market and so on. Different market structures employ different pricing strategies. These market structures and their ideal pricing strategies are described below.

It is important to keep in mind that this is a theoretical model. Real data does not exist, and the model does not precisely describe reality.” (Amacher & Pate, 2012) The perfect competition model is based on defined assumptions which prevent its adaptation into a real-life economy; however it is often described as the baseline model to compare all other structures. These assumptions are: (1.) Large volume of buyers and sellers: A perfect competition market has many buyers and sellers so none are able to influence the market. (2.) Homogenous products: All producers generate the same product with no differentiation. (3.) Excellent or perfect knowledge: Buyers and sellers have an extensive amount of information about the product and other producers. (4.) Free entry and exit into the market: Firms are able to allocate resources in and out of this market easily with little expense. (5.) Firms are able to quickly to respond to a changing consumer demand. (6.)Workers and other resources are easily moved in and out of the industry.