In this case study we see that Quasar Computers face all four types of markets, Monopoly, Oligopoly, Monopolistic competition and Perfectly Competitive market for its product Neutron. Neutron is a computer that enjoys a monopoly market during the first three years due to the patent. In three years time the patent on the “Neutron” expires and another competitor enters the market making the market an Oligopoly. After a few years, since Quaser faces Monopolistic competition, it has to change its pricing and marketing strategies as there are more competitors and less possibilities of controlling the price. When the product enters a perfect competitive market then no firm can control the price or market. During the Monopoly stage pricing strategy is more important. The firm should set the price at the quantity where marginal cost is equal to marginal revenue. During the oligopoly stage the firm should set a competitive price as well as focus on differentiation. In the monopolistic competitive stage the strategy should be mostly on to non-pricing as it will be difficult to control the price at this stage. The firm should focus more on advertising, branding and sale promotions. In the perfect competition market stage it is difficult for firms to control price or market share. The firm should accept the market set price and wait for a competitor to leave the market in order to increase the market share and sales.
Rival firms in an oligopoly match each other’s price cuts but do not match each other’s price increases. Competition in an oligopoly primarily takes the form of advertising and product differentiation. There are a lot of barriers to entry in an oligopoly like economies of scale, product differentiation and brand loyalty, mergers and takeovers etc (Slomon 174).
The group of companies prior to the merger was individual competitors in a market dealing with the same products. However, after being bought by two lawyers, the environment is bound to change as the competitive market changes in structure. The preceding scenario is an example of an imperfect competitive market referred to as monopolistic competition.
The research delves into monopolistic competitive market. The mere mention of monopolistic competitive shows that there are many small competitors in the same market. The competitors sell different products that can fill the same need. For example, the grocery store sells different brands of cheese.
In addition, this paper will tell Oligopoly theory gives us a rather confused picture of the relationship between economic profits and market structure" Has empirical investigation of this relationship helped us to clarify the picture? Why might it be argued that it takes only a few rivals competing in the same market to achieve an outcome very close to that of large numbers 'perfect' competition? Does it make much difference if the rivals can cooperate with one another?
Price Takers: The number of firms in these types of market are numerous, and contribute to very little of the total industry. The firms face horizontal demand curve at the market price and the prices are
There are different types of market in an economy and the decisions made by firms vary according to the market in which they operate.
In perfectly competitive markets, a change in price draws immediate response from the competitors. Firms face
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.
Firstly, a perfect competition situation comprises of a large number of small firms that compete with each other and produce at minimal costs for every unit. Secondly, a monopoly does not have rivals in the industry. It minimizes output to
These four different types of market have various characteristics. In perfect competition firms are the price taker and they all sell similar products. It is known as pure competition with many buyers and
Market Structure is an imperial study in Micro economics that may be defined as a collection of interdependent factors which determine the level of interaction between buyers and sellers prevailing in the market and adjust price and output level according to the interrelationship between them. In particular, market structure demonstrates the number of firms producing identical and homogeneous goods and services
14 pages (3500 words)Essay
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(Four Types of Markets: Monopoly, Oligopoly, Monopolistic Competition Essay)
In this case study we see that Quasar Computers face all four types of markets, Monopoly, Oligopoly, Monopolistic competition and Perfectly Competitive market for its product Neutron. Neutron is a computer that enjoys a monopoly market during the first three years due to the patent. …