...for its day to day operations, marketing and promotional efforts, and competing with the industry rivals (Loudon, Stevens, & Wrenn 2004). The key factors of the business environment that affect the business operations of a company include political, economic, technological, environmental, cultural, and demographical factors. This essay will explain various markets structures which are monopoly, oligopoly, perfect competition and monopolistic competition. The purpose of this paper is to discuss the impacts of different environmental factors on the business operations of Barclays. The discussion has been made in the light of international accepted microeconomics concepts and practices. Market structures Monopoly is a market structure, where only a single seller producing a product having no close substitutes. This single seller may be in the form of an individual owner or a single partnership or a Joint Stock Company. Such a single firm in market is called monopolist. Monopolist is price maker and has a control over the market supply of goods. On the other hand, Perfect competition a market structure characterized by a large number of firms so small relative to the overall size of the market, such that no single firm can affect the market price or quantity exchanged. Perfectly competitive firms are price takers. Moving on, in an oligopoly, there are only a few firms that make up an industry. This select group of firms has control over the price and, like a monopoly, an oligopoly...
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...Strategy Simulation Game Name: University: Course: Section: Instructor: Date: Table of Contents Introduction 2 Pure Monopoly 2 Oligopoly 3 Monopolistic Competition 4 Perfect Competition 4 Relation with Porter's Five Force Model 4 Conclusion 6 References 7 Strategy Simulation Game Introduction This paper explains the use of economics in managerial decision making based on the simulation. It describes decision making process of management in different market structures. The main objective of an organization is to maximize the profits in each type of market structure. Quasar Computers has done extensive research for the development of optical notebook. In the Year 2003, the company launched the first all-optical notebook computer branded as 'Neutron'. Neutron uses energy saving optical technology that established it as the market pioneer (Tata Interactive Systems, n.d.). The following pricing and other decisions are taken for this product in the different market structures. Pure Monopoly Quasar was the sole seller for the new and unique computer technology that established monopoly market structure for it. In the monopoly, profit maximization occurs at the point where marginal cost and marginal revenue equate to each other (Baumol & Blinder, 2005). In this scenario, Quasar objective was to maximize the profits because of its monopolistic situation caused by the patent rights on all-optical technology valid for three years from 2003. Quasar was able to control...
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...the key consideration. A oligopoly firm actually can have a large number of firms, approaching that of any monopolistically competitive industry. However, the distinguishing feature is that a few of the firms are relatively large compared to the overall market. A given industry with a thousand firms, for example, is considered oligopolistic if the top five firms produce half of the industry's total output. The hypothetical Shady Valley soft drink market contains 20 firms, but it is oligopolistic because the four largest firms account for over 60 percent of total industry sales and the top eight firms account for almost 80 percent. Identical or Differentiate Products Some oligopolistic industries produce identical products, like perfect competition in this regard, while others produce differentiated...
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...Similarities and Dissimilarities between[pic] Monopolistic Competition and Perfect Competition [pic] Vs [pic] Presented to: Sir Zahid Presented by: Muhammad Bilal Hussain Registration # K1f12mcom0009 Date:15 January 2013 Definition of 'Perfect Competition: [pic] A market structure in which the following five criteria are met: 1. All firms sell an identical product. 2. All firms are price takers. 3. All firms have a relatively small market share. 4. Buyers know the nature of the product being sold and the prices charged by each firm. 5. The industry is characterized by freedom of entry and exit. Definition of 'Monopolistic Competition: [pic] A type of competition within an industry where: 1. All firms produce similar yet not perfectly substitutable products. All firms are able to enter the industry if the profits are attractive. 3. All firms are profit maximizes. 4. All firms have some market power, which means none are price takers. Similarities and Dissimilarities between Monopolistic Competition and Perfect Competition [pic] The two market situations have the following similarities. 1. The number of firms is huge under perfect competition and monopolistic competition. 2. The freedom of entry and exit of firms is there in both the firms. 3. Firms compete with each other. 4. The break even point is established where marginal cost and marginal...
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...be a “price maker”. They can use their market power to control price and raise it to a level where price is greater than marginal cost (Sloman & Wride, 2009). Average cost Marginal cost Average revenue Marginal revenue Output Price 0 Q1 P1 Average cost Marginal cost Average revenue Marginal revenue Output Price 0 Q1 P1 Source: Adapted from Sloman & Wride, 2009. Fig.1. Diagram shows that a profit maximizing monopoly has the ability to profit maximize where marginal cost equals marginal revenue, and will therefore produce at output (Q1). Hence they will charge price (P1) that consumers are willing and able to pay for Q1. At price P1, the monopolist is making excess profit (highlighted). In perfect competition firms are “price takers” and will therefore charge the market price, whereas a monopolist will charge a relatively higher price and produce lower output. Therefore it can be seen that a firms’ aim of profit maximization under a monopoly market structure, leads to higher prices being charged to the consumer (Fig.1.). In practice it is difficult to be certain at which point profits will be maximized...
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...8/28/2012 Why Advertising Research? Introduction to Advertising Research Ying Xie MKT 6335: Advertising Research Fall 2012 Naveen Jindal School of Management University of Texas at Dallas What is advertising? What is good advertising, in your opinion? 1 2 Why Advertising Research? How do we create an advertising campaign? 1. creative strategy: a statement or concept of what a particular message or campaign will say – a big idea Absolute Vodka MasterCard “there are some things in life money can’t buy” 2. advertising appeal and selling proposition 3. creative execution: art direction and copy Why Advertising Research? Advertising research contributes throughout entire advertising planning process Short history of advertising research 1960’s vs. today 3 4 Process of Research Contribution The Market Successful advertising planning builds on research-driven analysis of the marketplace Current and potential future trends Forces shaping the marketplace How market forces affect own and competitive brands and advertising 5 6 1 8/28/2012 The Consumer Effective advertising based on thorough understanding of Forrester Segmentation: Involvement With Social Technologies target audience Three dimensions of target audience analysis: Consumer trends How consumers interact with brand/product/service Relationship between consumers and brand/product/service 7 8 Creative: development...
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...Differentiating Between Market Structures in Kudler ECO/365 Differentiating Between Market Structures in Kudler Kathy Kudler started Kudler Fine Foods out of La Jolla, California, in 1998 (Apollo Group Inc., 2011). With the success of the original store, she the opened stores in Del Mar and Encinitas California. Kathy Kudler came up with the idea for these high-end food stores as she has a fondness for cooking gourmet food. Kudler thought others might share her passion if they could conveniently locate the ingredients for these gourmet recipes. The first Kudler store was a complete success and turned a profit within the first year. As with any businesses some of the Kudler Fine Food stores were struggling with the declining economy. The Kudler store in Del Mar was having difficulty with expansion, higher wage costs because of unique work positions, and slow operations. The goal of any business is to increase profit. The company must have good oversight, smart marketing, and useful marketing survey results to determine if there are adjustments that could change the businesses profit. The monopolistic competition market structure include a large number of companies selling slightly similar products. There are very few barriers to enter into this market but there will be high costs for initial start-up. There are multiple dimensions of competition market structure including distribution outlets, advertising, and product attributes (Colander, 2010). ...
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...Week 7 assignments Task 1: Consider the following table of costs for the Winsome Widget Factory, which operates in a perfectly competitive market. The market price faced by this firm is $6.00 per widget. a. Fill in the formula for AFC, AVC, ATC, MC, TR, MR, and Total Profit at the top of the column in the gray section within the table. b. Fill in the missing values for TFC, TVC, AFC, AVC, ATC, MC, TR, MR, and Total Profit in the blue sections of the table. | Winsome Widget Factory | |Output |Total Fixed Cost | |Barnes & Noble books |-4.00 | |Coca-Cola |-1.22 | |Cigarettes |-0.25 | |Beer |-0.23 | |Gasoline |-0.06 | In your project, address the following questions: Using the elasticity estimates in the table above, classify the price elasticity demand as elastic or inelastic. Explain your reasoning. Explain the implications of those classifications on tax revenue collections when the per-unit tax increases as opposed to decreases. Using those classifications, make some assumptions regarding tax incidence. For instance, will buyers...
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...BUSINESS LAW EVENT MEMO UWSP Business341 Section 1 To: Professor Steven Schinker From: Christopher Schroeder Date: February 20, 2013 Event Title: “Oversight of Google.” Senate Judiciary Committee – Antitrust, Competition Policy & Consumer Rights Subcommittee hearing. Witness: Eric Schmidt (Google CEO). Event Format: Webcast Event Length: 2 hours 53 minutes Related Text: Antitrust Law, pp. 938-939 The event is a webcast of the testimony of Eric Schmidt, CEO of Google, in a hearing before the Senate Judiciary Committee investigating company’s potential antitrust violations. Google has been accused of using its considerable search engine market share (about 65%) to give preferential ranking in search results and advertising to the company’s other products and services, over that of their competitors. Senators posed questions to Mr. Schmidt regarding Google’s methods of using their search engine to list their products higher than those of competitors. Mr. Schmidt denied using different algorithms in their search results in order to favor their own products. The issue relates to several issues covered in the text, mainly to the discussion of monopoly power. Section 2 of the Sherman Act prohibits the misuse of monopoly power to restrict trade in the marketplace when a firm possesses an extreme amount of market power (Clarkson et al. 939). Google indisputably does have extreme market power in the search engine market with 65%. Since Google obtained its market power...
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...Monopoly Erinn Copeland ECO204: Principles of Microeconomics (BQC1232A) Instructor: Melvin Landry September 10, 2012 Monopoly Monopolies in the business world exist because dominating companies create obstacles that impede smaller companies from having an impact on the market. Monopolies are defined formally "as one firm within an industry that produces a product for which there are no close substitutes and in which significant barriers exist to prevent new firms from entering the industry” (Case, Fair, & Oster, 2009, pg. 254). When operating within an industry where entry into that industry is easy, a company has some market power because the product they are offering is the norm; however, when operating as a monopoly, companies dominate the market because their distinctive product carries more market power. Is it more beneficial for a company to operate as a monopoly or is it more beneficial for a company to share market power with other companies within their industry? Monopolies have stakeholders such as other businesses in their industry and consumers, which are affected by how they dominate an industry. How effective is a monopoly for the stakeholders within that company? Companies that operate as a monopoly do so because there are benefits to operating this way. In 2007, the potato chip industry in the Northwest was competitively structured and in long-run competitive equilibrium; firms were earning a normal rate of return and were competing in a monopolistically...
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...term used by economists to refer to the situation in which there is a single seller of a product (i.e., a good or service) for which there are no close substitutes. The word is derived from the Greek words monos (meaning one) and polein (meaning to sell). Governmental policy with regard to monopolies (e.g., permitting, prohibiting or regulating them) can have major effects not only on specific businesses and industries but also on the economy and society as a whole. Two Extreme Cases It can be useful when thinking about monopoly to look at two extreme cases. One is a pure monopoly, in which one company has complete control over the supply or sales of a product for which there are no good substitutes. The other is pure competition or perfect competition, a situation in which there are many sellers of identical, or virtually identical, products. There are various degrees of monopoly, and rarely does anything approaching pure monopoly exist. Thus, the term is generally used in a relative sense rather than an absolute one. For example, a company can still be considered a monopoly even if it faces competition from (1) a few relatively small scale suppliers of the same or similar product(s) or (2) somewhat different goods or services that can to some limited extent be substituted for the product(s) supplied by the monopolist. A business that produces multiple products can be considered a monopoly even if it has a monopoly with regard to only one of the products. A company with...
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...CHAPTER 25 Monopolistic Competition and Oligopoly A. Short-Answer, Essays, and Problems 1. What are the major features of monopolistic competition compared to pure competition and pure monopoly? 2. “Pure competition or pure monopoly industries will tend to be one-price industries. Monopolistic competition, however, is a multiprice industry.” Explain. 3. How does economic rivalry take place in monopolistic competition? Describe the different aspects of product differentiation and price competition. 4. What are types of firms that exemplify monopolistic competition? 5. How are monopolistically competitive industries identified with concentration ratios? 6. Assume that the short run cost and demand data given in the table below confront a monopolistic competitor selling a given product and engaged in a given amount of product promotion. Compute the marginal cost and marginal revenue of each unit of output and enter these figures in the table. Total Marginal Quantity Marginal Output cost cost demanded Price revenue 0 $ 25 0 $60 1 40 $_____ 1 55 $_____ 2 45 _____ 2 50 _____ 3 55 _____ 3 45 _____ 4 70 _____ 4 40 _____ 5 90 _____ 5 35 _____ 6 115 _____ 6 30 _____ 7 145 _____ 7 25 _____ 8 180 _____ 8 20 _____ 9 220 _____ 9 15 _____ 10 265 _____ 10 10 _____ ...
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...Learning Team Deliverable April NGO, Eric Saldevar, Melissa Drayton, Navneeth Nagrajan, Shawn Smith ECO/561 September 2, 2013 Professor Mark Erenburg Learning Team Deliverable In this assignment, learning team C will highlight about the market structure the University Of Phoenix competes in, how the structure influences the pricing strategy, and how the University differentiates its products from its competitors. The other areas learning team C will emphasize is about the erected non-price barriers to gain entry into different markets. Competition to the University Of Phoenix There are four market structures commonly used to group and describe industries. The market structures include pure competition, pure monopoly, monopolistic competition, and oligopoly (McConnell, Brue, & Flynn, 2009). University of Phoenix (UOPX) is a school that offers various degrees in various fields. UOPX is not the only school on the market and eliminates the possibility of UOPX participating in a pure monopoly. An oligopoly market structure does not apply as well because a large number of programs are available from different schools. Pure competition market structure does not apply as well because UOPX has some control over their product price. Monopolistic competition is the most applicable market structure for UOPX. There are many schools that offer the same type of degrees and programs. University of Phoenix is one of the leading schools in its industry and as modern technology...
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...1. Determining changes in equilibrium price and quantity for a perfectly competitive industry given changes in demand and/or supply (Ch. 2, p. 60-65; Class Notes) A. Graphical analysis given demand and supply curves a) While there is increased awareness of Vitamin C available from orange juice, a hard, freezing winter occurs in most of the orange producing areas. Demand increases while supply decreases. b) While the technology used for tobacco production is improving, there is increased awareness of the health effects of smoking. Supply increases while demand decreases. c) While there is increased awareness of Vitamin C available from orange juice, highly favorable weather conditions occur in orange producing areas for most the crop season. Both demand and supply increase. d) While there is increased awareness of the health effects of smoking, severe drought occurs in tobacco producing areas for most of the crop season. Both demand and supply decrease. 2. Determining the cross-price elasticity of demand between two goods (Ch. 3; p. 85-88, Class Notes) A. Arc cross-price elasticity, given discrete changes in price and quantity demanded Exy = [(Qndx - Qodx)/{(Qndx + Qodx)/2}] / [(Pny - Poy)/{( Pny + Poy)/2}] = [(Qndx - Qodx)/(Qndx + Qodx)] / [(Pny - Poy)/( Pny + Poy)] where, Qndx and Qodx are new and original quantities of good X demanded, and Pny and Poy are...
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...UNDERSTANDING MARKET STRUCTURES Bart Ford XECO 212 Jan. 15, 2012 Dr. Jill Trask Abstract Before someone can identify how to maximize profits in different market structures they must first understand how those markets operate and the characteristics of each. This paper will identify three market structures monopoly, oligopoly, and competitive structures and explain each in detail, as they pertain to maximizing profits, how price is determined for goods, how output of goods is determined, barriers of entry into each market, and the role that each market plays in the economy. UNDERSTANDING MARKET STRUCTURES A monopoly structured market consists of one provider for a particular good or product. A monopoly exists when one firm controls a specific resource, such as diamonds. Diamonds are very rare and scarce as a resource, subsequently if one firm were to control the vast resource of diamonds they would inevitably control the market sale of diamonds. In this way, the diamond firm would be able to set the price for diamonds at whatever they wished. Also, by doing this the firm can look into ways to cut costs related to gathering the diamonds for sale. The firm could cut back on labor costs and only use minimal amounts of labor because they can control the output during any and all stages of the production phases. Barriers of entry into the monopolistic structure are great, and include: exclusive patent rights, extremely high initial start-up costs, economic, social...
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