MARKET STRUCTURES Flashcards
one of the numerous infrastructures, systems, institutions, social relations, and procedures, wherein buyers and sellers usually interact with each other to exchange goods and services.
MARKET
the key points in evaluating business’ economic environments.
MARKET STRUCTURES
It deals with strategic decision making and focuses on both economics
and marketing, making professional entrepreneurs precisely judge industry, policy changes, and market news.
MARKET STRUCTURES
concern to both economists and marketers since they have different
methodological approaches in this, and each of them has their strengths and weaknesses.
MARKET STRUCTURES
CHARACTERISTICS OF MARKET STRUCTURES
= The relationship between a seller to another seller, a seller to his/her buyer, and many more.
= The concerns in entering and exiting the market.
= The dissemination of market shares for the largest firms.
Herein, there is a single merchant of a product for which there is no close alternative.
MONOPOLY
in which differentiated product has many vendors.
MONOPOLISTIC COMPETITION
wherein, a similar product has many sellers.
PERFECT COMPETITION
whereupon, there are few sellers of a standardized or a differentiated product.
OLIGOPOLY
pertains to a situation wherein there is only a single company that produces a certain product in the entire market.
MONOPOLY
commonly emerge because there is a high barrier to entry and exit in a particular market.
MONOPOLIES
If the key resource is solely owned by
a firm, the firm can limit the access to this source, therefore creating a monopoly.
OWNERSHIP OF A FUNDAMENTAL RESOURCE
In some sectors, a single firm can sustain products or goods at a lower price than two or more firms could, resulting in a natural monopoly, which arises even without the intervention of the government.
ECONOMIES OF SCALE
To suffice the interest of the public, the government usually restricts market entries in a legal way, which is through copyright laws and patents.
GOVERNMENT REGULATIONS
usually unwelcomed to society because it can cause deadweight loss by producing lesser outputs than the competitive ones, yet still, have higher prices. However, the government can react to these by demanding price regulations, establishing competition laws, nationalizing the monopolies, or by not doing anything at all.
MONOPOLIES
When there is a numerous quantity of small firms competing against each
other.
MONOPOLISTIC COMPETITION
several companies sell the same product but they have their differences.
MONOPOLISTIC COMPETITION
CHARACTERISTICS OF MONOPOLISTIC COMPETITION
= Every firm is a price setter and can maximize their profit.
= They sell similar yet slightly different products.
= The consumers can favor a product more than the other one.
= There are easy entrances and exit in this market.
type of market structure where many products are similar and may substitute each other since they have the same features, price and, quality.
PERFECT COMPETITION
They also have uniform prices that depend on the demand and supply which means that the market has full control over implying prices.
PERFECT COMPETITION
CHARACTERISTICS OF PERFECT COMPETITION
= Both the producers and consumers have perfect knowledge without information failures.
= Producers and consumers are making coherent decisions for their benefit.
= There are no hindrances to enter nor exit from this type of market.
= ompanies manufacture identical products that are not branded.
= Producers don’t have the power to influence the market price nor the condition.
a type of market structure where firms dominate the market by supplying either similar or differentiated products.
OLIGOPOLY
It is also difficult to enter this market since there are a lot of barriers. Moreover, participants in oligopolies are price setters rather than takers.
OLIGOPOLY
CHARACTERISTICS OF OLIGOPOLY
> Entrepreneurs maximize profits.
Oligopolies set prices rather than take prices.
There are a lot of barriers.
Interdependent
Rampant advertising since most companies use national media to promote their products.
