To understand the challenges that face a financial manager today it is important to understand the general characteristics of market structures and the impact of market liquidity, competitiveness, and efficiency on financial managers. Clarifying market structures will show the basic constructs that financial managers work under. With the basic understanding of market structures and how they influence financial managers or how financial managers influence their given market structures we will identify two problems that are faced in current markets chosen from two Proquest articles, the first problem discussed will be communication issues and we will follow that up with a larger issue, the global economic recession. In discussing these issues we will also hit on how managers can possibly address those issues according to those articles.
Market structures are fundamental in understanding how the economy works and how goods and/or services are exchanged. There are four basic market structures; perfect competition, monopolistic competition, oligopoly, and monopoly. Perfect competition is when there are numerous sellers with no difference in the product, no cost to enter or exit the market, and there is no influence on price. The most common type of market structure is a monopolistic competition market. In this type of market there are numerous sellers with little price differences in the product, a low cost to enter the market, and a slight influence on cost which depends on advertising. Another market structure we mostly identify with larger corporate companies is an oligopoly. This market structure is identified by only a few sellers with different products, there is an actual cost to enter the market itself, and it is highly competitive with the seller controlling most of the price according to competition. The last of the four