...RPVV, Surajmal Vihar Support Material For Teachers In Economics – Class XII Co-ordinators Dr. Seema Srivastava Ms. Meenakshi Yadav Contributors Dr. Seema Srivastava Ms. Meenakshi Yadav Mr.Bharat Thakur Technical Support Mr.V.K.Sodhi Ms.Sapna Yadav Ms.Radha Ms.Garima Ms.Ritu Class – XII Teaching -Learning Material for PGT (Economics) Based on “Week- Wise Distribution of Syllabus 2011 -2012” For the Month of July: Unit-IV (18.07.2011 – 25.07.2011) 7 days (25.07.2011-30.07.2011) 6days Abstract Present unit deals with the Concept of Market Structure which comprises of different market conditions under which the firms produce and sell products in the market. The unit also elaborates upon various Forms of Market Structure such as Perfect Market and * Imperfect Market (*Monopoly, Monopolistic Competition and Oligopoly). The conditions and determination of price under various Forms of Market Structure have been discussed. The content based classroom activity has been suggested at the end. It will help in developing Critical Thinking & Analytical ability among students which is the demand of this subject. Questions based on the content to check the progress have been included. Different types of Questions such as Very Short Answer Type, Short...
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...INTRODUCTION The world market of Mobile Phone devices have become one market in the current globalization system with the help of the media and the internet. Although the market is open and competitive, the intensive use of technology for differentiating their product and the big budgets spent in advertising and branding have made the majority of markets been dominated by few companies such as iPhone, Samsung, HTC, Nokia, Blackberry, Sony, Ericson, Motorola and Siemens. (Koetsire, 2013) a very tough competition between these companies each of them trying to win bigger slice of the market share and surprise their customers with new features trying to be a first mover advantage on each new feature occurs. This essay will analyze the mobile phone devices prices in the market and analyze the economic factors that determine the prices of mobile phones in a free market. OBJECTIVES The first objective of this essay is to identify and discuss each economic structure and decide which one applies to the phone devices market, the second objective is to discuss this structure in further details to understand the economic environment surrounding the phone devices industry. The third objective is to identify and discuss briefly each model that is used to analyze the economic structure in order to decide which model suits best for to analyze the demand and price behavior of this industry, hence analyzing this model in further details and apply in to the phone devices market. The last objective...
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...Market Structures Adam Timothy Rider ECO204: Principles of Microeconomics Evelyn Carlson 10/13/2014 When trying to gain insight into the local economy it is very important to understand the big picture of how the various market structures relate to each other. This can be accomplished by putting together some of the smaller pieces or characteristic of the market structure. These characteristics can be organizational, competitive or a variety of other features that categorize a firm as a specific market structure. Individual market structures can be described as the amount of firms producing identical goods and services. If you can identify the market structure you can often identify how they firms within the structure are going to price their products in the industry. The market structure will have an effect on the supply and demand of the different commodities in the market. The market structure will also influence barriers for entry and exit in the industry. In order to understand these structures in an economic community you must obtain an understanding of how they all work together to form the economic community. By the end of this report you will possess the necessary knowledge to understand the market structures in the micro economy. Before we begin to the inevitable breakdown of the individual market structures it is important to identify some of the key features of market structure in general. First it would be important to look at the...
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...Exercise 9 Solution Chapter 11 Firms in Perfectly Competitive Markets 11.1 Perfectly Competitive Markets 1) Which of the following is not a characteristic of a perfectly competitive market structure? A) There are a very large number of firms that are small compared to the market. B) All firms sell identical products. C) There are no restrictions to entry by new firms. D) There are restrictions on exit of firms. Answer: D Comment: Recurring Diff: 1 Page Ref: 368/368 Topic: Market Structures Objective: LO1: Explain what a perfectly competitive market is and why a perfect competitor faces a horizontal demand curve. AACSB: Reflective Thinking Special Feature: None 2) Which of the following is a characteristic of an oligopolistic market structure? A) There are few dominant sellers. B) Each firm sells a unique product. C) It is easy for new firms to enter the industry. D) Each firm need not react to the actions of rivals. Answer: A Comment: Recurring Diff: 1 Page Ref: 368/368 Topic: Market Structures Objective: LO1: Explain what a perfectly competitive market is and why a perfect competitor faces a horizontal demand curve. AACSB: Reflective Thinking Special Feature: None 3) Perfect competition is characterized by all of the following except A) heavy advertising by individual sellers. B) homogeneous products. C) sellers are price takers. D) a horizontal demand...
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...Company. Dynamic Strategic Alignment CC-307-017 Dynamic Strategic Alignment This note introduces the concepts and frameworks that are commonly used in strategic analysis, integrating them within an on-going process of creating and improving strategic alignment. 1. FUNDAMENTALS The objective of strategic management is to create alignments—within the firm and between the firm and its environment—that give the firm competitive advantage and enable it to achieve its goals. Strategic change, therefore, is fundamentally a decision about what changes to make in order to create or improve alignment that moves the firm closer to its goals. Managers may increase alignment and performance by a) changing elements of the firm, b) changing features of the environment in which operate, or c) shifting to another environment. There will usually be multiple options, and managers must decide which changes are necessary, possible and worth the effort required. When making a change of any type, there will usually be a temporary period of adjustment during which performance may actually drop. If the change was appropriate, however, this should be followed by an increase in competitiveness and performance. Managers may intentionally create mis-alignments as they pursue growth, whether expanding their current activities or diversifying vertically along the value...
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...Date: 24 January 2010 Topic: Market Structure Written by Kevin Discuss whether this model of market structure (oligopoly) is the most appropriate to explain the behavior of firms in Singapore. [15] Firms’ behaviours can largely be explained by the market structures they exist in as the number of players in the market and the kind of goods would determine the behaviours of the firms. In Singapore, the firms that dominate the economy are largely service industries as well as global firms that are exporting products overseas. Otherwise, the small size of Singapore markets allows just a few firms to dominate them and satisfy the demand of the entire market. These firms are large players in their markets, interdependent on their rivals’ actions and they create highly differentiated products, therefore, oligopoly market structure can be the most appropriate model for explaining their behaviors. Oligopolistic markets share the features of non-price competitions, aggressive branding to differentiate their goods, with firms being mutually interdependent, which results in their need to monitor each others’ actions and devising responses. There are also significant barriers to entry, possibly driven by economies of scale. As the pure forms of market structures such as perfect competition and monopoly doesn’t fit into the picture for Singapore firms, oligopoly’s features would better describe the behaviours of firms in Singapore. Take the example of the market for retro Straits-styled Coffeeshop...
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...Automotive Market Structure CADILLAC AUTOMOTIVE Cadillac Automotive is a U.S based automobile manufacturer that manufactures luxury vehicles. The company is owned by General Motors. Cadillac originally used to make carriages. The company sells in more than three dozen countries with its major operations centered in North America. It is known to be the second oldest automobile manufacturer in U.S. after GM and Buick. The industry Cadillac operates in is highly lucrative and money making (SWOT analysis of General Motors, 2013). The luxury cars do not make money by mass production rather by selling on premium prices. Here is the analysis of the industry Cadillac serves in and a discussion of its market structure (Automotive Strategy, Planning & Analysis: IHS Automotive, 2013). MARKET STRUCTURES The market structure tells the way business is done in an industry. The market structure can be of four basic types. A market may have strong government regulations or no government intervention at all. Also the market structures differ on the basis of companies in an industry. Following table describes how automotive industry differs from other industries and what market structure it has. Cadillac Automotive | Oligopoly | Perfect competition | Monopoly | Monopolistic Market Structure | Industry: Automobiles * There are multiple automobile manufacturers * Some of the major players are GM, Ford, Toyota, Honda, Ferrari, Lamborghini, and BMW. | The oligopoly market players may...
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...The first section of this report outlines the key features and characteristics of an oligopolistic market structure. An oligopoly market structure can be differentiated from others because it has distinct features such as competition among a few firms, high concentration ratio and barriers to entry, non price competition, differentiated products and high level of interdependence between firms. The report also outlines and describes why the UK detergent industry which is dominated by a few firms reflects the model of an oligopoly. Several real life examples have been used to confirm the theory of oligopoly. Moreover, the price rigidity observed in an oligopolistic industry has been explained by the kind demand curve theory. The second section of the report examines the case of price fixing by Procter & Gamble, Unilever and Henkel, who are major players in the detergent industry in Europe. It relates the concept of collusion and how it has led the firms to price fixing arrangements in the detergent industry. Finally the economic rationale why Henkel was not fined by the European Competition Commission has been discussed. Market structures may be generally categorised as the following: perfect competition, monopoly, oligopoly or monopolistic competition. These different types of market structures can be differentiated mainly by the number of competitors in a market and their market share. An oligopoly is a form of market structure that has few sellers that dominate the industry...
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...The first section of this report outlines the key features and characteristics of an oligopolistic market structure. An oligopoly market structure can be differentiated from others because it has distinct features such as competition among a few firms, high concentration ratio and barriers to entry, non price competition, differentiated products and high level of interdependence between firms. The report also outlines and describes why the UK detergent industry which is dominated by a few firms reflects the model of an oligopoly. Several real life examples have been used to confirm the theory of oligopoly. Moreover, the price rigidity observed in an oligopolistic industry has been explained by the kind demand curve theory. The second section of the report examines the case of price fixing by Procter & Gamble, Unilever and Henkel, who are major players in the detergent industry in Europe. It relates the concept of collusion and how it has led the firms to price fixing arrangements in the detergent industry. Finally the economic rationale why Henkel was not fined by the European Competition Commission has been discussed. Market structures may be generally categorised as the following: perfect competition, monopoly, oligopoly or monopolistic competition. These different types of market structures can be differentiated mainly by the number of competitors in a market and their market share. An oligopoly is a form of market structure that has few sellers that dominate the industry...
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...Business Proposal - Liliha Bakery ECO/561 November 26, 2014 Business Proposal - Liliha Bakery To be competitive in the bakery industry, the focus must meet the demand of local residents, as well as a significant level of tourism traffic from nearby highways. After researching several bakery comments on Yelp, there seems to be a demand for online service orders. An added feature to Liliha Bakery's homepage website will include an online ordering service along with a loyalty rewards program. This service is common in many food chain industries. The business proposal will provide a new service, the market structure, price elasticity, possible non-pricing strategies to increase barriers to entry, and determine how a mix of fixed and variable costs can change business operations. Liliha Bakery Liliha Bakery was a family owned business that opened in 1950 and later sold to a local entrepreneur. The bakery is a coffee shop and a diner with a full line of bakery items. The bakery has been in business since 1950. Liliha Bakery is a popular place to go when only "oven-fresh" baked goods will do. The competitive advantage for the bakery is its signature coco puffs that cannot be matched by any other bakery. There are currently two locations in the Honolulu area. One location provides the 24-hour customer convenience (Liliha Bakery, 2009). The current owner plans to open additional shops in Honolulu, as well as neighboring islands. With the recent opening of the second...
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...between the two? Should the structure of the financial system influence the depth or breadth of the financial safety net adopted by governments? Why or why not? The role and the future of safety nets as an inherent feature of the majority of financial systems today have been debated widely following the recent financial and economic meltdown. In order to develop adequate reforms for the global financial system, it is important to understand the role of safety nets in both developed and developing economies and its interconnection with the financial institutions. This paper will investigate two major issues. First, it will analyze interconnection of safety nets and universal banks in the lower- and middle-income countries (LMIC). Second, it will look into interdependence of the safety nets’ features and the types of the financial systems. It will argue that safety nets’ breadth and depth should be influenced by the structure of the financial system. Universal banks and safety nets in lower- and middle-income countries The 20th century witnessed universal banks and safety nets spreading across the LMICs. The explanation of this phenomenon is complex as universal banks and safety nets developed independently, but definitely influenced and reinforced each other in the LMIC markets. We will start with a closer look at the universal banks in these countries and the reasons for their widespread emergence across the LMICs. First, these markets have usually been characterized...
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...Cynthia-Week three provided us with information on market structure. According to "Businessdictionary"(n.d.), “The interconnected characteristics of a market, such as the number and relative strength of buyers and sellers and degree of collusion among them, level and forms of competition, extent of product differentiation, and ease of entry into and exit from the market”, with the four basic structures being Pure monopoly, perfect competition, oligopoly, and monopolistic competition. The key learning objectives for the week showed us what pricing strategies to meet goals, such as competition strategies or loss leader where the company cuts the price of items to get customers to shop more. It also showed us way companies can create non price barriers based on market structure like loyalty cards and branding of products. Price-quality and features are ways to increase product differentiation based on market structure, and energy cost to vendor ownership are ways to reduce costs for an organization. The most comprehendible concept of the week was the four basic market structures. Monopoly is the easiest of the concepts to comprehend because most companies in the US are a part of the monopolistic competition. Most of the products we consume are produced and sold by a large amount of producers and purchased by a large amount of consumers. Take the chip industry for example; there are variations of cheese nacho chips by a large number of companies. Doritos, Great Value and...
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...SUMMARY OF REPORT I. Introduction to Four Market Structure II. Comparative Characteristics of Four Market Structures III. Four Market Structures a. Pure Competition i. Characteristics ii. Demand Curve iii. Examples iv. Summary b. Pure Monopoly v. Characteristics vi. Demand Curve vii. Examples viii. Summary c. Oligopoly ix. Characteristics x. Demand Curve xi. Examples xii. Summary d. Monopolistic Competition xiii. Characteristics xiv. Demand Curve xv. Examples xvi. Summary FOUR MARKET STRUCTURES Market structure is the selling environment in which a firm produces and sells its product The preceding chapter on the theory of production and cost made us understand the behavior of producer towards an efficient use of productive inputs because the use of inputs is associated with economic cost be it explicit or implicit cost. Efficient use of resources means proper identification of the use of the land, labor, capital and entrepreneur. These should not be underused as in 1st stage production or overused as in the 3rd stage of production, so that the cost associated to the production level can be minimized. This chapter examines a broad range of markets and explains how the pricing and output decisions of firms depend on market structure and the behavior of competitors. To determine...
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...industry in India – 1. Automotive Research Association of India (ARAI) – It carries out sponsored R&D projects and forms standards for various entities viz. the industry, Government of India and national and international agencies. 2. Society of Indian Automobile Manufacturers (SIAM) – It facilitates communication between the Automobile industry, Government, national and international organizations. 3. Automotive Component Manufacturers Association of India (ACMA) – It promotes Indian Automotive Component Industry by trade promotion, technology, quality enhancement and collection & dissemination of information. With the regulatory bodies spanning across all segments, they have induced significant changes in the market structure of the automobile industry. Protection: 1970-84 Growth of the industry was hampered...
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...industry : Example Entities Involved CFA: most companies’ keep 1- 3 CFAs in each target Indian state and total CFAs are 25-35. Ranbaxy has 28 CFAs across India Stockist: 5-15 depending on city area Retail Pharmacy Basic Distribution structure Distribution chain of ABC company in Andhra Pradesh Typical Supply chain Distribution Structure Normally two types of supply chain models are followed: 1. Replenishment based model: This is most suited in a dynamic environment where demand, features, quality required, change very often. In such scenario there should not be any excess or shortage of inventory at stockist/sub stockist or retailers end. Manufacturer need to bear higher cost of transportation in this model at the cost of greater responsive at stockist and retailers end. Teva Pharma, a major generic pharma company based out of Israel follows replenishment based system. 2. Forecast based model: suited in an environment where upcoming demand will be similar to the forecasted one i.e. demand, features required are not changing very often. Manufacturer’s transportation cost goes down. This model fails when product specifications or demand change rapidly resulting in excess/shortage of inventory Typical sales force structure in Pharma industry A large pharmaceutical company in India is usually divided into strategic business units (SBUs) based on therapeutic areas like cardiology, urology etc. Sales force is structured under each therapeutic area and managed...
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