...Industry A Concentration ratios are used to measure the extent of competition in an industry by looking at the total output produced by the largest firms. Although there are several measures in the literature, generally the biggest four and biggest eight firms are considered (Cabral, 2000). A low concentration ratio is regarded as an industry with more competition and firms have very low control. The low concentration can be from 0 to 50 per cent and the industry can have a structure ranging from perfect competition to oligopoly. Since in industry A there are 20 firms and the CR is 20 per cent, it can be deemed as a low ratio. Therefore, the industry is a perfectly competitive one with a lot of firms competing with each other, and no one firm controls a big chunk of the market. A perfectly competitive industry has many buyers and many sellers, also the products are quite standard and resemble to each other (Microeconomics: The Basics). The number of sellers makes it impossible for any single firm to control the market and the price is determined by the demand and supply conditions. Since the products are very similar or identical to each other, the buyers can switch from one good or service to another when there are price differentials. Additionally, the barriers to entry and exit are quite low; hence firms can easily enter and leave the industry. As a result of all these features, the economic profits are zero and maximum efficiency is achieved. Nevertheless, the pure perfect...
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...Review of the Boeing VS Airbus Case Study Introduction In the market for large aircraft demand the emerging niche for very large aircraft (VLCT aircraft seating more than 400 passengers) saw only two competitors: Boeing and Airbus. Even though both competitors’ moves were clearly marked by technology enhancements, and different target markets but both exhibited strategic interdependence. Option with Boeing: Boeing being the market leader for almost a decade as a manufacturer of large commercial aircraft and had also reached economies of scale, the need to sustain its market share it presumed that “customers might demand for new”. Any potential growth was only through taking super leap and making VLCT jumbo aircraft which needed huge investment beyond Boeing’s financial reach (that too for an uncertain future market) Boeing had the technology advantage over airbus because Boeing had already tested and launched Boeing 747 (a large passenger carrier). Only stretch of design was needed to build up “jumbo dream line VLCT aircraft”. But being a private firm and not state run the kind of investment required to develop new carrier and also the uncertainty of the future market were problems. It had the option to continue to manufacture famous “Boeing 747” and not go for VLCT Jumbo. But the VLCT superjumbo was a strategic commitment of more than average interest because of its sheer size, irreversibility and potential impact on industry structure if nothing goes bad. VLCT...
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...OLIGOPOLY An oligopoly is a market structure in which a few firms dominate. When a market is shared between a few firms, it is said to be highly concentrated. Although only a few firms dominate, it is possible that many small firms may also operate in the market. Concentration ratios Oligopolies may be identified using concentration ratios, which measure the proportion of total market share controlled by a given number of firms. When there is a high concentration ratio in an industry, economists tend to identify the industry as an oligopoly. Characteristics 1.) There are few competing sellers but they are too large in the size of a giant company. 2.) Products are homogenous, others are differentiated. 3.) Entry of new firms can be very difficult. 4.) There is mutual interdependence among firms in the market 5.) Demand curve for oligopoly is kinked demand curve. Examples - Gasoline, cement, sugar and telecommunication are examples of products of homogenous oligopoly. - Cars and machines are products of differentiated oligopoly. - Oil and telecommunication (Globe, Smart, Sun Cellular) companies are examples of firms operating in an oligopolistic environment. Demand Curve KINKED DEMAND CURVE If the assumptions hold then: • The firm's marginal revenue curve is discontinuous (or rather, not differentiable), and has a gap at the kink • For prices above the prevailing price the curve is relatively elastic • For prices below the point the curve is relatively...
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...Understanding the dynamics of competitors within an industry is critical for several reasons. First, it can help to assess the potential opportunities for your venture, particularly important if you are entering this industry as a new player. It can also be a critical step to better differentiate yourself from others that offer similar products and services. One of the most respected models to assist with this analysis is Porter’s Five Forces Model. This model, created by Michael E. Porter and described in the book “Competitive Strategy: Techniques for Analyzing Industries and Competitors,” has proven to be a useful tool for both business and marketing-based planning. Background The pure competition model does not present a viable tool to assess an industry. Porter’s Five Forces attempts to realistically assess potential levels of profitability, opportunity and risk based on five key factors within an industry. This model may be used as a tool to better develop a strategic advantage over competing firms within an industry in a competitive and healthy environment. It identifies five forces that determine the long-run profitability of a market or market segment. * Suppliers * Buyers * Entry/Exit Barriers * Substitutes * Rivalry Supplier power * Supplier concentration * Importance of volume to supplier * Differentiation of inputs * Impact of inputs on cost or differentiation * Switching costs of firms in the industry * Presence of...
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...This paper will focus on the behaviour of oligopolists and the situations they are confronted with in their daily business. The paper is divided in three parts. The first part explains the basic keywords. The second part tries to explain the nice and the sad sides of an oligopolist, and will discuss the consequences of their behaviour. As well, I will try to examine the statement "being an oligopolist is not easy", and whether it is true or whether the truth lies in between. Aspects of Market Structure The four types of market structure are listed in the drawing below: Characteristics of an oligopoly Definition Oligopoly is a type of imperfect competition with a market structure, that has only a small group of sellers which offers similar or even identical products. Oligopolist, Oligopoly An oligopoly is a market form in which a market is dominated by a small number of sellers (oligopolists). There are few participants in this type of market and each oligopolist is aware of the actions of the others. Oligopolistic markets are characterised by interactivity. The decisions of one firm influence and are influenced by the decisions of other firms. The question is how we can describe the market situation of an Oligopolist. If we compare it to the other possibilities of a market situation such as a competitive market or a monopolistic market, it is neither of them. The typical characteristics of an oligopoly is that each of the market players offer...
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...Running Head: Market Structures Differentiating between Market Structures Simulation University of Phoenix ECO 365 08/19/2013 There are many advantages of the supply and demand forces on the market and the way it operates. An important advantage is their market regulating utility. They help encourage competition and charge more and therefore make bigger overall profits. Consumers are willing to pay more for better products even though this trend differs in other market structures. One of the major limitations of supple demand forces is a socially undesirable outcome as in the case of a market structure that is characterized by monopoly. This is where one single firm will control all production resources and therefore has exploitative capabilities in the terms of pricing and promoting. One example can be that of an electric company that has a virtual monopoly over production resources of a specific region and charge whatever prices they want. Coca Cola Co. is ran in a beverage industry that is highly concentrated oligopolistic. They compete directly with another major company, Pepsi Co. These two companies hold over 98% of the beverage market in all of the United States. Both Coca Cola Co. and Pepsi Co. compete globally don’t have much competition knocking on either of their doors. Cadbury-Schwepps owns the remaining 2% of the US market share but it’s a struggle for them to try and expand share as well as getting more attention. Oligopolistic market...
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...Deborah J Ross Auto Edge & Oligopoly Colorado Technical University Online Abstract: At noon, I share an elevator ride with Auto Edge’s Executive VP, George Wirtz. Ingrid stated that I gave her some good data about relocation. The President could use my help with a presentation that he is making to a crucial group of shareholders. I will discuss the 4 various kinds of market structures. I understand that each market structure is different as related to the number of firms that compete in each one, competition levels, coming into and exiting the economy, the price range of goods, and product variety. I will relate Auto Edge’s market structure to pricing concepts. The demand for goods is related to price sensitivity. This differs. I will align market structures with elasticity of demand structures. A monopoly involves no pressures as related to competition. This can well be related to government regulation. Consumers have no freedom as related to choices. Monopoly is an example of perfect inelasticity. Government regulations are hard to keep without legal restrictions. The post office is a great example of a monopoly. They only deliver envelopes (Hagen, 2014). De Beers is a great example of a monopoly. They offered diamonds very openly. They put a complete lockdown on the whole chain of supply. De Beers put quite a bit of pressure on retailers to just sell their diamonds. The company would buy up all diamonds; so that the diamond supply was limited...
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...Market structure is defined by economists as the characteristics of the market. It can be organizational characteristics or competitive characteristics or any other features that can best describe a goods and services market. The major characteristics that economist have focused on in describing the market structures are the nature of competition and the mode of pricing in that market. Market structures can also be described as the number of firms in the market that produce identical goods and services. The market structure has great influence on the behavior of individuals firms in the market. The market structure will affect how firm price their product in the industry .For example in a competitive market the firms are price takers while the industry has the sole duty of price setting. The market structure will affect the supply of different commodity in the market. When the competition is high there is a high supply of commodity as different companies tries to dominate the markets. A market structure will affect the barrier to entry for the companies that intend to join that market. A monopoly markets structure has the biggest level of barriers to entry while the perfectly competitive market has zero percent level of barriers to entry. The other factors that influence the firm behavior under a market structure are the efficiency. Firm will be more efficient in a competitive market while firms will be least efficient in a monopoly structure. The level of competition in firms...
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...Introduction of soft drink industry: Soft drinks introduced in seventeenth century. These were known as non carbonated soft drinks and prepared by mixing honey and lemon with water and this soft drink was sold in Paris in small plastic cups. Later on it was produced in large scale John Mathew invented an equipment which is capable of producing carbonated water in large scale. The first flavoured drink was prepared by Doctor Philip Sing Physic in 1807. Later on it was liked as health drink and liked by customers as well and ordered to be carried at home. After this demanded by peoples then it leads to manufacturing industries of bottle plants. This was an interesting phenomenon that soft drinks were coming on bottles and this increased the sales of soft drinks also. It was for the first time that the bottle was containing water with bubbles. For the first time Michael Ovens had started the glass blowing machine which were used in automatic production of bottles. With use of these machines 69000 bottles were produced in place of 1500 bottles which were hand-made. After all these efforts the Soft drink industry started centuries ago. In the present time soft drinks is a very large industry and it is known as cold drinks now. Now in India there are only two major competitors Pepsi and Coke. This industry comes in beverages industry in India and it is growing industry because everyone likes to have cold drinks but it is seasonal the sales of cold drinks are in boom mainly in...
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...In a perfect competitive market, all market participants, both consumers and producers, are price-takers (Sayre, 2013, p. 330). To be considered a perfect competitive market all firms sell and identical product, are price takers, have a relatively small market share, buyers know the nature of the product being sold and the prices charged by each firm, and the industry is characterized by freedom of entry and exit (Perfect Competition, 2013). The nail salons in my area are in perfect competition. They all offer beauty services primarily of nail care like manicures, pedicures, and nail enhancements as well as eyebrow trimming and waxing. There are many nail salons in my area as well as all over the United States and other countries. They all offer a standardized service of nail care. Barriers to entry in the nail care services are small (Taulli, T, 2009, para 8). The beauty salon industry is massive therefore not one particular salon would have all the market power where they will affect the market price. I honestly do think that nail salons aren’t price takers. A price taker is a seller that has no control over the price of the product it sells (Tucker, I. 2010, p. 200). I think that they actually do set their own prices depending on the specific area. I am presently in New York where a full set is anywhere from $25 to $45 whereas in Pennsylvania a full set can range from $15 to $25. The salons do compete using the prices. I notice that when a nail salon opens up they will have...
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...LISTENING: http://www.englishclub.com/listening/everywhere.htm TEST: http://www.englishteststore.net/index.php?option=com_content&view=article&id=10427&Itemid=434 http://www.youproxytube.com/browse.php?u=NqyEELUDpo3Z2KcyWfykFJvHrPeYF1A2ZdoRY7wOex3sgZJNYes%3D&b=29 http://www.youproxytube.com/browse.php?u=NqyEELUDpo3Z2KcyWfykFJvHrPeYF1A2ZdoRfdIVRR%2FUiqJMP5Y%3D&b=29 indefinite exercise: http://www.englishexercises.org/makeagame/viewgame.asp?id=1555 choose the correct answer: 1) Mary volleyball on Mondays. 2) I every weekend. 3) Chris and Pat to school at 7:30 AM. 4) The students the homework in the afternoon. 5) Martha a tree. Write the previous senteces into the NEGATIVE form. Use "DO NOT" (not don´t) or "DOES NOT" (not doesn´t), please. a) Camila the homework at home. b) I my bike everyday. c) John to music. d) Tom football at the club on Tuesdays. e) My father his brand new car. f) You the newspaper on Sundays, g) My sister T.V. in the evening. h) Lucy and I at 9 o´clock everyday. i) Danielle home at 6:30. Complete the questions, then answer. 1) you up at 8 AM? Yes, . 2) Sylvia the homework? No, . 3) your mother your bedroom? Yes, . 4) you English? Yes, . 5) Clarisa a tree? No, . http://www.englishclub.com/grammar/verb-tenses_present_quiz.htm Test Form of Affirmative Sentences - Part 1 Choose the correct form. 1. We sometimes books...
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...ASSIGNMENT ON MARKET STRUCTURE IN BANGLADESH Course Title: Managerial Economics, Course Code: 5302 Prepared by Mohammad Shakawat Hossain Matric No.- R132140, Semester- 3rd section- Spring-2014 Submitted to Mr. Monir Ahmed Associate Professor Faculty of business Administration, IIUC Department of business Administration International Islamic University Chittagong Monopolistic Competition: Monopolistic competition, is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes. In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms. The firms in Bangladesh are not able to exactly differentiate their product but the pressure of various aspects such as interest rate spread and the presence of international banks make them provide the services to the customers. In this effort the banks in Bangladesh are able to create differentiated products. The basis for the differentiated products is different which another reason for is differentiated products. These are market size in the region, returns for the banks and the risks that are associated. Based on this the banks are differing their costing and in different manner. For example some banks are offering flexible rates and others are offering fixed rates for interest. The banks also vary...
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...within the market and the firms with a reasonable market share are also fairly established and have a lot of capital. This makes it difficult for small & upcoming businesses to enter the market. The overall global automotive market is in a period of strong growth and profitability, and sales have reached prerecession levels in some areas. However the European and UK market is recovering the slowest due to the scale of the recession (Hirsh et al, 2014). This may have altered the structure of the industry as a whole. Industry Structure This chart is a representation of how the market share of each company is divided up in UK market in 2014. This evidence helps to further back up the point that the automotive industry is an oligopoly (imperfect) as few firms are the market leaders with a higher percentage e.g. Volkswagen, Vauxhall and Ford. Whereas many other firms are operating around the same market share. Source - Mintel Source - Mintel Supply may be set to fall as the price of raw materials is predicted to increase further. This is due to a general shift in the materials used; aluminium...
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...when you were younger and the things you used to do. Emphasize vocabulary words that you have learned this year. Each slide must have at least one picture of you at that particular time. You can also have pictures that represent what you are talking about in the slide. Start scanning your family pictures. If you choose to title each slide, be sure to use Spanish. Everything must be in Spanish. TITLE SLIDE: Write your name and a title for your presentation. You can add pictures or clipart that best represent you and your interests. BABY PICTURE SLIDE: Begin your paragraph with “Nací en _____” telling where you were born. Then write 2 sentences in the imperfect tense describing yourself and telling things that you used to do. ELEMENTARY SCHOOL PICTURE SLIDE: Write 3 sentences in the imperfect tense again to describe yourself, your friends or family. For example, tell about sports or special activities you used to participate in. What did you used to watch? What were your favorite toys or games? Tell about your clothes, favorite music, family activities, favorite foods, best friend, pet… JUNIOR HIGH OR HIGH SCHOOL PICTURE SLIDE: Write 3 sentences in the preterit tense to tell about a one-time experience you had: a trip, something you bought, a game you played, something you won, a person you met, a concert you attended, your first day at work… THE PRESENT SLIDE: Write 3 sentences in the present tense to talk about something you are interested in...
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...cost levels. The amount of competition in a market is measured using concentration ratios (e.g. the five firm concentration ratio). There are two different types of competition which firms may undertake, price competition and non-price competition. In price competition, firms compete on the basis of price, for example by increasing the price of a good or service, the demand will either increase or decrease accordingly depending on its price elasticity of demand. In non-price competition firms compete in less risky forms of competition other than price, such as advertising and branding. Non-price competition exists in imperfect competition (usually oligopolies). Imperfect competition occurs in situations when there are a number of competing firms (with market power), but the market is without some or all features of perfect competition. The three types of imperfect competition are duopoly, oligopoly and monopolistic competition. Perfect competition on the other hand exists when a market has a large number of small firms, with no one firm influencing price (firms are price takers, not price makers). These firms...
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