Differentiating Between Market Structures
ECO/365
June 2013
John Ilokwu Barnes and Noble Market Structure

Barnes and Noble (B&N) is the ultimate destination for consumers to expand their knowledge or enjoy a quiet getaway with their favorite author or connect with a new author. “Leonard Riggio, the company's chairman, began his bookselling career while attending New York University in the early 1960s, and specializes in books, magazines, video, DVD, and music. As a publically traded company with almost 700 bookstores in the 50 United States,” (Barnes) the largest retail bookstore in shopping malls, colleges and universities, and major strip centers plus on the web provides a strong market structure for B&N. In economic theory there are “four different markets; perfect competition, monopoly, monopolistic competition, and oligopoly” (Colander, 2010). Without different markets there would not be any structure. Therefore, it is important to understand and determine the different market structure, the effect of externalities on market outcomes, the barriers new firms have when entering the market, the effect of government interventions, taxation, and regulation on economic behavior. Also this paper will identify three competitive strategies to maximize profits in the long run, the efficacy of strategies on the organization of B&N, and the three types of merger; horizontal, vertical, and conglomerate.

B&N made a vertical merger when they became part of the Waldenbook stores, but a conglomerate merger transpired when Waldenbook store sold to K-Mart in the earlier 1990 as their product consist of books, maps, CDs, DVD, board games, and gift packs (Wikipedia). In 2010 B&N biggest competitor Border made the bid to engage in a horizontal merger, and Border purchased B&N for $ 960 Million. According to Friedman, “the merger would allow Borders to slash its