Essay on Market Structure - 829 Words

Market structure is defined as the particular environment of a firm, the characteristics of which influence the firm’s pricing and output decisions. There are four theories of market structure. These theories are: nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;†¢nbsp;nbsp;nbsp;nbsp;nbsp;Pure competition nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;†¢nbsp;nbsp;nbsp;nbsp;nbsp;Monopolistic competition nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;†¢nbsp;nbsp;nbsp;nbsp;nbsp;Oligopoly†¦show more content†¦nbsp;nbsp;nbsp;nbsp;nbsp;Examples of perfect competition include some agricultural markets and a small subset of the retail trade. The stock market, where there are hundreds of thousands of buyers and sellers of stock, is also sometimes cited as an example of pure competition. nbsp;nbsp;nbsp;nbsp;nbsp;The theory of monopolistic competition is built on three assumptions: (1.) There are many sellers and buyers. (2.) Each firm produces and sells a slightly differentiated product. (3.) There is easy entry and exit. nbsp;nbsp;nbsp;nbsp;nbsp;The monopolistic firm has no rivals, and it produces a good for which there are no substitutes. In a monopolistic competition, it has a downward slope. This means that it has to lower price to sell an additional unit of the good it produces. Just like the pure competition, monopolistic firm charges the highest price it can possibly charge for its product. nbsp;nbsp;nbsp;nbsp;nbsp;Examples of monopolistic competition includes retail clothing, restaurants, and service stations. nbsp;nbsp;nbsp;nbsp;nbsp;The theory of monopoly is a theory of market structure based on three assumptions: (1.) There is one seller. (2.) The single seller sells a product for which there are noShow MoreRelatedMarket Structure Of The Company Essay1088 Words   |  5 PagesMarket Structure Introduction There are four types of market structures and they are monopoly, perfect competition, monopolistic competition, and oligopoly. What is a market structure? A market structure is â€Å"the makeup of the companies operating in a particular market.† Why is the market structure important to the producer as well as the consumer? It distinguishes the difference in seller numbers, buyer numbers, seller entry barriers, and buyer entry barriers. The main differences in market structuresRead MorePerfect Competition : A Market Structure1942 Words   |  8 PagesWhen trying to top look for a market structure to fit your needs a person should start with perfect completion, monopolistic competition, oligopoly, and monopoly. These four market structure are used by business to aid the businesses in producing and selling products. Perfect competition is described as a market structure that has many sellers and buyers that produce the same product and they are allowed to leave and exit the in dustry at any time. Free entry and free exit is a crucial characteristicRead MoreDifferentiating Between Market Structures Essay1260 Words   |  6 PagesDifferentiating Between Market Structures Yvonne C Rivera ECO/365 May 16, 2013 Paul de la Pena Abstract There are many TV service providers available in the U.S; however there are only two companies that offer services via satellite. Dish operates within the monopolistic competition market. Dish has been in business since the early 1980’s and has gradually worked its way up to become one of the leading satellite provider and innovator of new technology. In 2013 they offer service to overRead MoreMarket Structure Of An Economics Perspective Essay1728 Words   |  7 PagesIntroduction Market structure from an economics perspective is defined as the characteristics of the market that impacts the behavior or way firms operate, which economists use to determine the nature of competition, and pricing tactics of businesses in the market. Within a market, the market structures are distinguished by key features, including the number of sellers, homogeneous or differentiated goods or services produced, pricing power, level of competition, barriers to entering or exit theRead MoreThe Impact of the Internet on Market Structure8084 Words   |  33 PagesTHE IMPACT OF THE INTERNET ON MARKET STRUCTURE Bruno Cassiman** Sandra Sieber** RESEARCH PAPER No 467BIS July, 2002 * Professor of General Management, IESE ** Professor of Information Systems, IESE Research Division IESE University of Navarra Av. Pearson, 21 08034 Barcelona - Spain Copyright  © 2002, IESE Do not quote or reproduce without permission The PwCIESE e-business Center is a joint initiative of IESE Business School and the professional services firm PricewaterhouseCoopersRead More The Main Categories of Market Structures Essay1668 Words   |  7 PagesCategories of Market Structures Recent industry analyses typically have strong relation with economic theories. There is a theory, belongs to microeconomics, divides industries into categories according t the degree of competition that exists between the firms within the industry, i.e. the theory of Alternative Market Structures. This essay based on three questions divides into 3 parts to explain and evaluate the questions. This essay (PART A) outlines the main categories of market structuresRead MoreThe Market Structures Of A Market Structure962 Words   |  4 Pagesfour market structures that function in the worldwide market. Each of these market structures correlates with one another to create the demand and supply of the market. However, these market structures have some unique traits that no other theory can have alike. Therefore, a comparison and contrast is necessary to distinguish each of these theories from one another. These market structures of the economy are perfect competition, monopoly, monopolistic competition, and oligopoly. These market structuresRead MoreMarket Structure And Functions Of The World Economy1832 Words   |  8 PagesAssignment Student name : - Md Mokshed Hasan Student id : - 614181 Part one: - Market structure and functions Q1,a) Financial markets:- It’s a marketplace where buyers and sellers participate in the trade of assets like equities, binds, currencies and derivatives. Financial markets are well-defined by having transparent pricing, rudimentary regulation on trading, cost and fees and market forces determining the pieces of stocks trade. Its participants need to fulfil some of certainRead MoreMarket Timing and Capital Structure for Baker and Wurgler1526 Words   |  7 Pagesequity when their market values are high, relative to book and past market values, and to repurchase equity when their market values are low. We document that the resulting effects on capital structure are very persistent. As a consequence, current capital structure is strongly related to historical market values. The results suggest the theory that capital structure is the cumulative outcome of past attempts to time the equity market. Introduction â€Å"Equity market timing† refersRead MoreMarket Structure Of The Market Structures1779 Words   |  8 Pagesmayor to look at various market structures. I plan to provide excellent information and answer all the questions that will help the mayor understand the market structures of many of the businesses in his city. According to Arthur Levitt, the tension between centrality, on the one hand, and competition, on the other, is probably the oldest of all market structure issues (Levitt, n.d.). Market structures are being used daily to help foster companies. Describe each market structure discussed in the course