This essay analyzes the four basic market structures - perfect competition, monopoly, oligopoly and monopolistic competition. The four structures analysed in the paper differ in terms of number of sellers and buyers, differentiation of products and barriers to entry…
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The basic understanding underlining the case study is that the four basic structures are perfect competition, monopoly, monopolistic competition and oligopoly. Perfect Competition and Monopoly are the extreme forms and most of the markets in existence lie between the two extremes. It has been observed by economists that perfect competition and monopoly are theoretical. During 1930s Edward Chamberlin of Harvard University and Joan Robinson of Cambridge University tried to make the study of market structures more realistic. The structure they analyzed is called monopolistic competition. “The concept of perfect competition was first introduced by Adam Smith in his book "Wealth of Nations". Later on, it was improved by Edgeworth. However, it received its complete formation in Frank Kight's book "Risk, Uncertainty and Profit".” Perfect competition is the market structure where you have large number of buyers and sellers. The sellers sell identical products. An example of Perfect Competition is the market of bathing soaps. Key characteristics of Perfect Competition are
1. Knowledge is freely available
2. No barriers to entry
3. Firms produce identical products
4. No single firm can influence the price. The firm is the price taker and the price is determined by the industry demand and supply.
5. There are large number of firms in the market
6. The motive of the firms is profit maximisation
Monopolistic competition and Oligopoly lie between the two extreme market structures of Perfect Competition and Perfect Monopoly.
Later on, it was improved by Edgeworth. However, it received its complete formation in Frank Kight's book "Risk, Uncertainty and Profit" (1921).” As stated on : http://economicsconcepts.com/perfect_competition.htm Perfect competition is the market structure where you have large number of buyers and sellers. The sellers sell identical products. An example of Perfect Competition is the market of bathing soaps. Features of Perfect Competition: Key characteristics of Perfect Competition are 1. Knowledge is freely available 2. No barriers to entry 3. Firms produce identical products 4. No single firm can influence the price. The firm is the price taker and the price is determined by the industry demand and supply. 5. There are large number of firms in the market 6. The motive of the firms is profit maximisation 2. Monopolistic Competition Monopolistic competition and Oligopoly lie between the two extreme market structures of Perfect Competition and Perfect Monopoly. What is Monopolistic Competition? In this market structure, there are many buyers and sellers, like in a perfect competition. However, the products are more differentiated. An example could be Restaurants, where every restaurant may specialize in a different cuisine. As Karen Collins puts it in the book Exploring Business, “Products can be differentiated in a number of ways, including quality, style, and convenience, location, and brand name.” Features of Monopolistic Competition: The Key features of Monopolistic Competition as mentioned in the book “Economics: Principles and Policy” by William j. Baumol and Alan S. Blinder are: 1 Large number of buyers and sellers 2 Freedom of entry and exit 3 Perfect Competition 4 Heterogeneous
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(“Market Structures and Pricing Strategies Essay Example | Topics and Well Written Essays - 2750 words”, n.d.)
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(Market Structures and Pricing Strategies Essay Example | Topics and Well Written Essays - 2750 Words)
“Market Structures and Pricing Strategies Essay Example | Topics and Well Written Essays - 2750 Words”, n.d. https://studentshare.org/business/1396599-the-four-basic-market-structures.
The Pricing Strategies and Programs of Etisalat
Background on Etisalat
Etisalat is a telecommunications company headquartered in the United Arab Emirates. It was founded in 1976 under the name Emirates Telecommunications Corporation, a joint-stock venture between various Emirates partners and a once-large British company called International Aeradio Limited.
Oligopolies are also described within a discussion providing a comparative framework. Various market strategies in each of the designated economic climates are described, with strengths and vulnerabilities of each as topics of investigation. 3. Introduction to Market Structures Marketplace realities surrounding the firm in question are the defining characteristic in terms of price and profitability.
The choice of a pricing method to be adopted largely depends on the nature of the product and the targeted market structure and composition. The available methods include the cost based method which involves the price determination based on the cost of production.
In these, decision-making and the formulation of feasible business strategies holds more in terms of success than most other factors considered in business. Proper decision-making that results in viable strategies should consider certain factors, and this includes gauging the market trends, consumer preferences as well as analyzing the strategies that competitors have laid out (Smith 2011, p.
According to the report to understand the role and importance of pricing in the marketing mix and in targeting specific markets, consider the following example of Whirlpool Duet. At least until the 20th century, Washers and dryers had the image of products, which could never justify a high price.
Pay is actually very crucial for organizations to decide, giving sufficient, desirable and competitive pay is a key decision to make. There are different approaches to set pay ranges which are used by organizations, of which two major are job evaluation approach and market pricing approach (Laabs, 1997).
These market structures range from the perfect competition to monopoly, in between these two extremes are the monopolistic competition and oligopoly. Their differences may be summarized through the number of firms present in the industry, barriers to entry, their market power and the type of products they are selling (Schiller, 2006).
al, 2011). Therefore, market structure affects the market outcomes by influencing opportunities, motivations and decisions of vast industries participating in the market. The aim of market structure analysis is to isolate the effects in an attempt to predict and explain the market outcome.
In economics, market structure is the feature of a particular market in the economy. The features of a market can be organizational, competitive, or any other characteristics that define the commodity market. The yardstick that economists use in defining market structures is the pricing models and the nature of competition in a particular market.
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