Competition-MicroEconomics - Term Paper Example

Comments (0) Cite this document
Summary
Price and non-price competition are largely found in markets. Perfect competition is a market situation having numerous buyers and sellers capable enough to affect the product price. Freedom of entry and exit, homogenous product,…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.2% of users find it useful
Competition-MicroEconomics
Read TextPreview

Extract of sample "Competition-MicroEconomics"

Download file to see previous pages A large number of firms, product differentiation and easy entry and exit are the main characteristics of monopolistic competition.
Competition is one of the important market forces. There are mainly two types of competition exist: price competition and non-price competition. Price competition is mainly experienced in a highly competitive market where perfect competition takes place. On the other hand, non-price competition occurs mostly in monopolistic market situations in which competing firms offer different attractive offers and special discounts with an aim of attracting and retaining customers. Competition provides an environment in which not only buyers benefit but also sellers enjoy normal profits. For the buyers, competition is a source to obtain reasonable but competitive prices for goods and services and they do not need pay additional charges for the goods and services. This mostly occurs in perfectly competitive market in which buyers have perfect information about the goods and services and homogenous products are sold. Monopoly is form of market structure in which there is only a single seller who controls the entire supply of goods or services. Monopolistic competition is a combination of both perfect competition and monopoly. In which, there are certain characteristics of both monopoly and perfect competition remain functional. In the following parts of the paper, first definition of competition has been provided and it is followed by types of competition. After defining each type of competition, a conclusion part has been included to sum up the paper.
Firms observe two types of competition: price competition and non-price competition. The firms compete with each other to attract and retain customers. For this purpose, they adopt different competition strategies to entertain their business objectives. Diminishing the price of their product below the price of competitors is one way to increase ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Competition-MicroEconomics Term Paper Example | Topics and Well Written Essays - 1750 words”, n.d.)
Retrieved from https://studentshare.org/miscellaneous/1600337-competition-microeconomics
(Competition-MicroEconomics Term Paper Example | Topics and Well Written Essays - 1750 Words)
https://studentshare.org/miscellaneous/1600337-competition-microeconomics.
“Competition-MicroEconomics Term Paper Example | Topics and Well Written Essays - 1750 Words”, n.d. https://studentshare.org/miscellaneous/1600337-competition-microeconomics.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Competition-MicroEconomics

Microeconomics

... Point “a” does not represent an efficient allocation of factor of production. To see this, consider a point like ‘b’ in the same graph shown below. It provides the same level of output of good X as point “a” since we still are on the same X isoquant, but the production of Y has increased since now we are on a higher Y isoquant. Similarly, we could have picked a point on the Y isoquant through point “a” which is tangent to a higher X isoquant. This would imply a higher production of good X without reducing the output of good Y. Since such Pareto improvements are possible, point “a” can’t be an efficient allocation. 2) The Coase theorem states that in the absence of transaction costs, ownership of property rights does not matter... Point “a”...
3 Pages(750 words)Essay

Microeconomics

...? Microeconomics 08/26 Microeconomics In 2007, the potato chip industry in the Northwest was competitively structured and in long-run competitive equilibrium; firms were earning a normal rate of return and were competing in a monopolistically competitive market structure. In 2008, two smart lawyers quietly bought up all the firms and began operations as a monopoly called “Wonks.” To operate efficiently, Wonks hired a management consulting firm, which estimated a different long-run competitive equilibrium. The new company is now a “monopoly” which is only the sole provider of potato chip in the entire country. Now, there is only a single...
6 Pages(1500 words)Essay

Perfect Competition/Microeconomics

...? Microeconomics: Perfect Competition Microeconomics: Perfect Competition Introduction Economics is a social science concerned with the production, distribution and consumption of goods and services (Dilts, 2004). It is mainly divided into microeconomics and macroeconomics. Microeconomics basically focuses on the supply and demand theories while macroeconomics is concerned with the national economy. Microeconomics identifies areas where a market fails to give efficient results and describes the conditions required for perfect competition. The law of demand and supply assumes that markets are perfectly...
4 Pages(1000 words)Essay

Microeconomics

...of goods. As this factor is responsible for price fixation of goods and services, the change in supply vs. demand position can lead to change in price. As resources become limited, microeconomics tries to analyze the relationship between market conditions, product prices, as well as the market mechanism which establishes this relationship. Such mechanism has a great role to play in the allocation of resources, in such scenario. Therefore, microeconomics has a significant role in determining the conditions required for a perfect competition. It also studies the conditions which may have led to market failure, when results are not produced efficiently. However,...
10 Pages(2500 words)Term Paper

Microeconomics

...Topic:  MACROECONOMICS Table of Contents 2 Introduction 3 Body 4 This report aims at demystifying two definite aspects of the Keynesian macroeconomic model. It is a static demand side model that came into existence after the Great Depression of 1929. Firstly, the national income account identity, to be precise the saving-investment identity in a Keynesian economy is discussed. Accounting identities always exhibit equality regardless the magnitude or value of its variables. Or in other words accounting identities are statements that by definition are always true. In a closed or Keynesian economy the savings-investment identity is derived without taking into consideration export and import. The saving-investment is derived twice... MACROECONOMIC...
7 Pages(1750 words)Term Paper

Microeconomics

...Micro & Macroeconomics Even though Microeconomics and Macroeconomics may appear to be the same thing, there are distinct differences between the two. The one thing that these two concepts have in common with each other is that they both come from the main category of economics (“Difference”). The prefixes of these two functions give an indication of their origin—micro is smaller while macro is larger. This is just a simple explanation of these two economic principles because, in reality, it is a lot more complicated than that. Microeconomics is to do with the market’s supply and demand factors that establish the price levels of an economy (“Difference”). Macroeconomics is similar to this except that it...
2 Pages(500 words)Essay

Microeconomics

...Microeconomics Microeconomics Resources in a country can be ified into two groups; tangible and intangible resources. Goods such as food and drinks, electronic goods, vehicles etc are tangible resources whereas services like education, healthcare, tourism, business consultancy etc are intangible resources. UAE is a country which is blessed with immense oil resources whereas it lacks scarcity in manpower resources. In fact UAE is currently facing demographic imbalances because of the huge expatriate workforce available there. The number of overseas population is more than the number of locals in UAE. Abdullah (2007) has pointed out that “8 out of 10 people living in the UAE were born abroad as per the...
6 Pages(1500 words)Research Paper

Microeconomics

...Discuss how a firm in a perfectly competitive market can make a loss in the short run yet remain in the market. What happens to the firm in the long run? Introduction A huge number of producers with the same standardized products characterize competitive business markets. A competitive market does not give the producers or sellers the ability to influence the price. Entries and exit of sellers into the market provide unnecessary no price actions (Bartlett 12). In such a business environment, a firm can perfectly make a loss in the short run as all its competitors provide the same products. The probability of every firm in the same industry to experience a loss depends on the...
3 Pages(750 words)Essay

Microeconomics

...Consultation on Market Structures Consultation on Market Structures Market structures are the different conditions or characteristics of a certain market that interrelate to determine the degree of competition and profitability of a given market in an economy. There are different market structures in the economy determined by the different characteristics including monopoly, perfect competition, oligopoly, and monopolistic competition. Perfect competition is a market structure where there are many buyers and sellers operating in the market having no influence on the price, hence are price takers (Samuelson & Stephen, 2012). One of the main characteristics of perfect competition includes sale of homogenous goods where all firms... in the...
8 Pages(2000 words)Essay

Microeconomics Monopoly and Competition

...Writing Assignment #2: Monopoly and Competition Simpson explains that monopoly powers in a market results from exclusive rights that are granted to certain firms which include the ownership of scarce economic resource or copyrights and patents regarding certain ideas or designs. Merging of two firms could result in a monopoly which involves the control of more 25% of a certain market by a single firm. With all these, monopolies will stand to be the only ones who can produce a certain product and distribute in the market without a lot of competition because there have no other firms that can produce substitutes for their products. This cannot be the case in competition because...
3 Pages(750 words)Essay
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 Term Paper on topic Competition-MicroEconomics for FREE!

Contact Us