Contact Us
Sign In / Sign Up for FREE
Go to advanced search...


Comments (0) Cite this document
This paper endeavors to elucidate different variations of global market structures, with an emphasis to imperfect competitive markets. To achieve that purpose, examples researched from online business publications and journals have been featured. …
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER96.3% of users find it useful
Read TextPreview


The World of Imperfect Competition Mukoma, Robert. Academia Order Essay Monday, 12 August This paper endeavors to eluci differentvariations of global market structures, with an emphasis to imperfect competitive markets. To achieve that purpose, examples researched from online business publications and journals have been featured. Definitions to financial terminologies are consolidated taking a keen considerations to the study work provided in order to achieve a broader understanding of the topic in question. As much as possible the paper has encompassed recent and practical examples to explain each type of market structure featured. To introduce this paper, a brief startup article on Google Documents vs. Microsoft office suite opens the discussion on how parameters that deviate from a perfect competitive market structure drives a the competition into business rivalry, creating an oligopolistic market structure where decisions taken by one Firm affects or influences decisions taken by a competing firm. To further the debate an article from CNNMoney’s Fortune publication introduces a recent development between Google+ and Facebook, businesses that would otherwise be symbiotic in nature, turn to be suspicions of each other and develop similar products that on the long run will compete against each other. Keywords: Perfect competition, monopoly, monopolistic, oligopoly The World of Imperfect Competition In 2007, Google unveiled Google documents application, a free word processor, and spreadsheet. The company’s intentions might not have been to bite a chunk of Microsoft’s core franchise- Microsoft office suite; but it affected downwards Microsoft’s expected earnings by a few million dollars. Some users opted for the free word processor and spreadsheet as an alternative for the more superior and expensive Microsoft’s word and Excel spreadsheet applications. In the recent past Facebook having borrowed from Google’s playbook unveiled a search service dubbed Graph search. On the short-term it was not intended to directly compete with the search engine giant Google, but it definitely sent a clear message that there was intention to dislodge Google from an almost monopoly in the search service business. Mark Zuckerberg, Facebook's co-founder and chief executive, insisted that Graph search was not a web search. Facebook recruited a number of Google engineers to develop the innovative search tool that has superior queries compared to Google search. Although Graph search was initially limited to search within Facebook’s social network for people, photos, interests, and places, it could actually be a legitimate business for Facebook when fully fledged.1 (Miguel, 2013). In 2011 Google responded by launching the Google+ project, which according to Vic Gundotra, the senior vice president who oversees Google’s social products is simply an enhancement for Google search application. Google denies that Google+ is a competitor to Facebook despite irrefutable similarities in application. (Danny, 2011). They are both social sharing tools. Market structures exist within two extreme parameters, i.e. perfect competition and monopoly. In a perfect competition, all four competitive assumptions are met, i.e. many buyers and sellers, no barriers to exit and entry, homogeneous product, and perfect knowledge. (Economic Concepts) Forces of demand and supply determine the price, therefore, sellers have no absolute power to increase the price lest they lose market share due to availability of substitute products. On the further opposite, a monopoly market structure equates to a single seller, who essentially forms the industry. Entry to such a market is constrained by high costs, social and political influence. An example would be power supply in many countries is done by a single company. A single firm supplies goods or service, sets the price, and enjoys huge profits due to luck of substitute products. Imperfect competitive market structure exists between the utopia of perfect competition and monopoly when there a breach of one or more of the mentioned competitive assumptions occurs, it consists of many firms within an industry in which one, or two of the firms drive the market dynamics based on either product variations or the interaction between rival firms. Advertising in imperfect competition can create an impression of a competitive edge and trigger price competition, which would attract new entries or create brand loyalty and present a barrier for entry. In some cases, price discrimination occurs within different customer demand segments. There are two broad types of imperfect competition, i.e. monopolistic and oligopoly. A Monopolistic competition occurs in an industry with many firms offering differentiated products, with easy entry and exit conditions unlike in a monopoly. An example would be pizza restaurants; they all offer pizzas but vary presentation, sizes and enjoy some independence in setting prices. On the short run, monopolistic firms like a monopoly can increase prices and enjoy economic profits but the markets responds instantaneously by shifting the demand for the product from the firm downwards. The profits on the short-term act as an incentive for new entries that provide substitute products, inevitably the firm has to lower its prices in order to sell more thus reducing its margin. This shift indicates a profit maximization solution, i.e. the demand curve is tangent to the average cost. When firms are making losses, some exit the market place hence reduce availability for substitute products leading to an increase in demand for the product from existing firms, consequently they respond by increasing prices, and thus begin the process of a reverse long-run equilibrium. In this market, long run equilibrium occurs when a typical firm is earning zero economic profit. Oligopoly, allows for a few sellers that control the market place. They produce almost similar products hence compete for market share. A decision taken by one firm leads to a reaction from the other firms. When Nike signed Michael Jordan, who was to become an iconic athlete of all times, they not only gained a hero athlete but also an eloquent spokes person. Air Jordan brand from Nike surpassed a billion dollars in sales. Reebok reacted by signing Shaquille O'Neal.2 (Omar). Oligopolies are interdependent, constantly monitor, and keep guessing their rivals’ next move, as clearly illustrated earlier in the paper by the example of Facebook vs. Google+. In conclusion, Imperfect competition portrays the realistic global markets scenario. According to Economic Concepts, “Perfect competition model is hotly debated in economic literature. It is argued that the model is based on unrealistic assumptions.” Therefore, the concept of a perfect competition is a comparative benchmark to define other forms of competitive markets. Bibliography Akhtar, Omar “Nike vs. Reebok, 50 greatest business rivalries of all times.” CNNMoney, March 21 2013. Retrieved from,  Helft, Miguel. “Facebook vs. Google: It's on in search” CNNMoney Fortune, January 15, 2013. Retrieved from, Nayar, Vineet “imperfect competition.” The Economic Times, 11 April 2012. Retrieved from, “Perfect Competition” Economic Concepts, n.d. Retrieved from, Sullivan, Danny. Google’s Facebook Competitor. The Google+ Social Network Finally Arrives. Search engine land. Jun 28, 2011. Retrieved from, Read More
Cite this document
  • APA
  • MLA
(“THE WORLD OF IMPERFECT COMPETION Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
THE WORLD OF IMPERFECT COMPETION Essay Example | Topics and Well Written Essays - 750 words. Retrieved from
(THE WORLD OF IMPERFECT COMPETION Essay Example | Topics and Well Written Essays - 750 Words)
THE WORLD OF IMPERFECT COMPETION Essay Example | Topics and Well Written Essays - 750 Words.
“THE WORLD OF IMPERFECT COMPETION Essay Example | Topics and Well Written Essays - 750 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document


The Imperfect Enjoyment by John Wilmot

... English 30 January Contradiction in "The Imperfect Enjoyment" by John Wilmot, Second Earl of Rochester Introduction The poemImperfect Enjoyment by John Wilmot portrays a life and feelings of a man who is impotent. Literally his impotency is physical incapacity while figuratively it can be interpreted as any sort of emotional as well as physical inability that results when a person is subjected to a dire or life threatening situation. Fundamentally the poem talks about the feelings of an individual when he is unable to perform a particular action due to his incapacity and the hatred that builds in him towards his surroundings and people around him as a result. Although the themes and the imageries used in this poem are highly explicit...
3 Pages(750 words)Essay

Research Paper on Perfect Competion

They all sell identical products, and the seller is a price taker, not price maker” (Jain & Trehan, pp. 243). The characteristic of ‘price taker’ signifies that the price is set by the interaction of demand and supply in the industry, and no individual firm can increase or decrease the price (Jain & Trehan, pp. 243). As mentioned above, perfect competition is mainly based on certain assumptions and as such, it does not exist widely in the real world (Dwivedi, pp.294). Perfect competition is based on the assumption of ‘perfect mobility’. The model assumes that there is perfect mobility of factors of production between firms. There are, therefore, no restrictions on the movement of labor from one firm to another and there is no tra...
4 Pages(1000 words)Research Paper

Airline Deregulation as it relates to Competion and Unions

... cents in 1997. This means that airline ticket prices are almost 40% lower today than they were in 1978 when the airlines were deregulated” (Thierer, 1998). Since this trend offered fruitful economic benefits to passengers, the passenger miles flown tremendously grew. For instance, in 2005, there were 750 million passenger miles whereas this figure was only 250 million in 1978. The magnitude of market competition was more in Europe as compared to US. In addition, the airline marketers competed also on safety and service quality. The higher level competitiveness of Southwest Airlines and Jetblue can be mainly attributed to the airline deregulation. Once the marketers got the right to set prices, they minimized direct and indirect subsidies...
2 Pages(500 words)Essay

An Imperfect God by Henry Wiencek

... [You work] Book Review An Imperfect God: George Washington, His Slaves, and the Creation of America By Henry Wiencek(2003). New York: Farrar, Straus, and Giroux. DOI: 10.1177/0021934705282095 Theme. An Imperfect God by Henry Wiencek is about George Washington's life as a slave master where he benefited financially from slavery. However, by the final ten months of his life when his family owned more than 300 slaves, he began to contend with the thought that America - a nation that was "conceived in liberty and dedicated to the proposition that all men are created equal- was upholding slavery" (p. 5). This inner battle led him in 1799 to amend his will, emancipating his slaves upon his and his wife Martha's deaths. Wiencek...
6 Pages(1500 words)Book Report/Review

Imperfect Memory

...1Running Head: Imperfect Memory: Remembering Imperfect Memory: Remembering False Words William Council In Roediger and McDermott's 1995 experiment, students remembered a false word from a list of 15 semantically related words. After memorizing lists of 15 words, the participants in my experiment were shown three words - 1 word from the list, 1 word visually similar to the list and 1 word unrelated to the list. Using a scale from 1 to 4, participants measured how sure they were that each word was listed earlier. Participants "remembered" visually and semantically similar words more often than unrelated words. Introduction Cramming for test is a recipe for failure. There are times when the brain's associative capacities are a hinderance...
6 Pages(1500 words)Essay

Can we consider Russian democracy imperfect

... Democracy in Russia Democracy is clearly defined by the former American president Abraham Lincoln; “Government of the people, by thepeople, for the people”. (Democracy, 2004) In other words in a democratic country the people hold the extreme rights in the selection and administration of the government.. Democracy can be seen at its best in some countries while in some other countries same thing cannot be said even though they claimed to be so. For example India is considered to be one of the strongest democratic countries in world while Pakistan is considered to be one of the weakest democratic countries because of the political instability and autocratic approaches of the administration. Political stability is strongly associated...
4 Pages(1000 words)Essay


...Imperfect competition Introduction The nature of the market structure is quite influential on the nature of the product or services offered by a firm. There exist numerous market structures in the business world and each structure has its own distinctive features. Essentially, it is imperative to consider the type of market structure before establishing a business enterprise. According to Ahlstrom & Bruton (2010), some earlier studies reveal that some business portray constant dismal performance due to ignorance of the proprietors/entrepreneurs on matters concerning market structures. Imperfect competition is one of the types of market structures that exists in the business field. Generally, an imperfect competition market can...
2 Pages(500 words)Essay

Does Terrorism Work as a Means of Changing World Policies

That is the dilemma associated with terrorism--- the double-edged weapon. The old saying that one man's terrorist is another man's freedom fighter, is still in vogue. A man belonging to Al-Qaeda can be a so-called freedom fighter for Bin-Laden but for President George Bush Government, he is simply a terrorist, who spills the blood of the innocents.

The basic and the debatable question here is whether terrorism really works in the present scenario in changing the Governments and their opinions? There appears to be a number of instances across the globe wherein it has been felt that terrorists, except killing innocents and making media headings and stories, have generally failed in their deadly mission in toppling the dem...
7 Pages(1750 words)Report

Managing Emerging Technologies: The World Bank Group

information Technology helps the businesses in cutting costs and creating value to the organization as a whole, by minimizing the digital divide. This helps in developing new and effective business processes as well as in making value propositions especially in the new and modern corporate world whose business network is spread far and wide, such as the World Bank for instance. Information technology plays a vital role in integrating systems and strengthening the strategic ties between service providers and customers, thereby rendering effective services.
The World Bank is involved in various activities providing a wide range of services to several developing and in transition countries across the globe. The bank, owned, fina...
11 Pages(2750 words)Case Study

Traditional Women in the Modern World

It is within the family that many attributes of gender inequality are generated and replicated. Economic and interpersonal dependence on both genders and in various instances more vicious forms of inferiority, are classic elements of marriage and family. Women’s long-established roles leave them with the trouble of widespread domestic and nurturance obligations in addition to limited authority within the family. These trends represent gender inequality within the home and are echoed in the ideology justifying a gender-separated workforce in which women’s earnings and prospects are disproportionate to men’s. While almost every woman has some family bonds to men, by their kinship ties to their fathers and brothers,...
9 Pages(2250 words)Assignment

The World Food Program

However, like many organizations, the World Food Program has its own crises that have apparently affected its programs and projects in all parts of the world. These problems, which will be discussed later, limit WFPs' capacity to distribute its resources and services to distressed countries like Ethiopia. It must be noted that in recent years, food rationing was cut by one third (WFP, 2008). In September 2008, WFP published its Media Backgrounder on Ethiopia which reported that the organization targets to support 9.6 million Ethiopians as well as its funding shortage of US$ 465 million. It also recorder 567,000 metric tons shortage of food which will last until March 2009 (WFP, 2008).
Ethiopia has been among the poorest and l...
9 Pages(2250 words)Assignment

The Importance of Employee Empowerment in the Global World

Empowerment is the authority to make decisions within one’s area of operation without having to get approval; from anyone else. Here the operatives are encouraged to use their initiative to do things the way they like. To this end, the employees are given not just authority but resources as well so that they not only take decisions but implement them quickly. This empowerment means giving the employees the authority to make decisions and providing them with financial resources to implement these decisions (Koch & Godden, 1997 11).
Employee participation and empowerment participation means sharing the decision making power with the lower ranks of an organization in an appropriate manner (Lashley & McGoldrick, 199...
9 Pages(2250 words)Assignment

Imperfect Markets - Oligopoly and Monopoly

...3 Short Essays Submitted By: XXXX Number: XXXX XXXX of XXXX Number of words: (2225 Excluding Bibliography) Question 1: The majority of markets fall under the realm of imperfect competition, namely monopolistic, oligopoly and monopoly. Compare any two of them by referring to their assumptions, market conditions and strategies and give a few examples. Answer: (584 words) Oligopoly: Oligopoly is a market structure where the market consists of a few firms. This is mainly to allow for the barriers to be erected and so that there is a barrier for entry of new firms and competition. The various products that are provided by firms in this type of markets are either differentiated or undifferentiated. There are two major factors...
9 Pages(2250 words)Assignment

The Origins of the Second World War

The accord at present is that it was Hitler's resolve to change the basis of European society that took the war to Europe in 1939. It was not essentially the war he was planning for; the facts propose that Hitler was intending to set up Germany for a huge conflict with Russia in the early 1940s. However, indisputably it was a war forced by his persistent pursuit of strategies that stood on race and on space (Henig, 1997).

The Second World War was originated due to the Fascist attack and the failure of democratic powers to prevent this assault. There seem to be a number of reasons for the Second World War to occur. German rearmament started after Hitler left 1932-34 Geneva Disarmament Conference, declaring that as the po...
7 Pages(1750 words)Article

Is the Business World Flat or Spiky

On the other hand, these globalization standards are opposed by some critics and argue that globalization does not have to be a requirement for putting up a business in other countries, thus it is just a choice for entering a foreign market. Accordingly, standardization is applicable specifically to high-end markets and with accord to the market segmentation such as the trends that the young people patronize (Mullman, 2006) Regardless of the idea that globalization is mostly based on how the company standardizes the products, the home country still holds the profitability of the business as the economy affects how the foreign investors and other national sources back up the business (Stiglitz, 2006).
Making the world flat mak...
9 Pages(2250 words)Assignment

International Business: World Economic Forum and Davos 2010

...Introduction Globalization, one of the most hotly debated issues means global capitalism to some while others consider it to be the continuation of modernism with the forces of wealth, progress, democracy and happiness at play (Kellner, 2002). Globalization is considered to be beneficial which promotes economic prosperity, cultural diversity and technological advancement. According to the critical social theory, technology and capital work together to create a new globalized and interconnected world. While each force of globalization is important, technological revolution has impacted the business models, value creation and differentiation (Spelman, 2010). The cloud computing technologies that have made the popular social networking...
7 Pages(1750 words)Coursework

Globalization and World Economic Forum at Davos 2010

... market is offset by an upswing in another market. Risk is less inherent in a portfolio of activities across the world rather than in a single or a few local markets. But the effective harnessing of the benefits of globalization would depend on the scale of the companies placing small local companies are at a distinct disadvantage compared with global companies (Mundim et al, 2000). In competing with global companies in attracting resources such as skills, the local companies lose out. They become easy targets for takeover by global companies with deep pockets. The globalization also undermines regional, cultural and linguistic diversity among markets (Lawrence & Weber, 2008). There is a prevalent premise among the economists...
7 Pages(1750 words)Coursework

Comparing the Brave New World and Todays World

... A Brave New World 26 February Introduction Man has always wondered since time immemorial about his ultimate place in the big universe. He had attempted to find meaning in this scheme of things without much success. A key repeated theme is seeming failure to find that true meaning that will justify his existence. What usually happens is that the more Man goes deeper into the search for ultimate meaning, the more he finds nothing. This is confounding, to say the least, and goes to show how useless the search could be. Many people had been doing this search several times and came up with nothing. Out of this seeming hopelessness and uselessness came the philosophical idea of the absurd – that Mans search for individual meaning is bound...
8 Pages(2000 words)Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic THE WORLD OF IMPERFECT COMPETION for FREE!

Contact Us