You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estimate that the annual cost of this business will be as follows:
According to Boyes and Melvin (2013)…
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In this market, the price elasticity of demand is inelastic. This means, demand remains relatively unchanged with changes in price. This characterizes a monopolistic competition market structure. According to Boyes and Melvin (2013), this market structure is characterized by a downward slopping demand curve. Product differentiation largely influences demand elasticity such that the greater the differentiation, the more inelastic the demand elasticity. Therefore, Justcookbooks.com ventured into this highly differentiated market that makes it a mini-monopoly, hence the inelasticity of demand would see the demand for its cookbooks minimally affected by changes in pricing as it establishes itself in the market.
Success in this market would therefore be guaranteed by seeking greater differentiation of the online cookbooks. With the argument by Schotter (2009) that greater differentiation causes greater inelasticity, greater differentiation at Justcookbooks.com would cause demand to remain unaffected by changes in pricing, hence consistent quantity demanded.
For Justcookbooks.com, pricing with different types of customers and asymmetric information would be most appropriate. According to Arnold (2013), this strategy involves charging less cost per unit for those who buy more and a higher cost per unit for those buying less. Using this strategy, Justcookbooks.com would encourage purchases of high volumes which increase revenue and thus
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These describe the main aspects of markets such as the products sold, the number of firms, and ease of entry and exit. The different market structures include: perfect competition, monopoly, monopolistic competition, and oligopoly. A perfectly competitive market is characterized by various features which in most cases are not found in a real world but are used as benchmarks for other markets.
The article is specifically about the Apple Inc- one of the leading consumer electronics companies in the world producing MP3 Players, tablet computers, desktops and other computers and consumer electronics goods. Though the strategy of the Apple has been discussed as the one which is based upon platform strategy however, the article focuses on how this industry or market works and who are the key players, how external events are affecting the firms and how prices are set up.
This however, does not mean that every product they introduce will increase the expected profits. Spangles were one candy type that unfortunately was taken off the shelf for underperformance. Marketing and bringing it back as a profitable product line will be accomplished through identifying different market segments, developing a set of marketing objectives, and proposing a marketing plan for the products revival.
An excludable good is a good whereby a person can be prevented from using it (Mankiw 2004). Private goods are both excludable and rival while public goods are non-excludable and non-rival. Common resources are goods that are non-excludable but are rival goods.
Perhaps, American IT Company Microsoft is the only company in the world, which enjoys absolute monopoly in the market. No other companies in the operating system market are strong enough to challenge the supremacies of Microsoft. It is widely believed that one of the major success factors of Microsoft is its divisional organizational structure.
Arguably, there are varied market structures in every market and their characteristics in presenting quantity and imposing prices upon the units affect consumption patterns and the buyer and seller relationships. For example, perfect market competition, oligopoly, monopoly, and monopolistic competition vary broadly in terms of the market outcomes under the practices of the coinciding factors of demand and supply (Martin, 2012).
Monopoly: This occurs easily when the economies of scale exist all through the range of production as then large firms succeed in having output at lower costs than smaller firms. This can be seen in the cost of production graph given in graph 1. In the initial stages, there are a large number of small firms starting production at about the same time.
Economics helps people to understand the politics and business aspects among others. At the same time, it also helps to understand the needs and demands and along with that it helps to choose the best allocation of the resources from various
To determine the major characteristics of Market Structure, economists have focused on the factors like nature of competition prevailing in the market & the mode of pricing. The system is greatly influenced
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
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