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 Lays all have their own version of this chip as well as a variety of others and consumers purchase them based on what they like. The prices vary based on a variety of things from season to store of purchase.
The most challenging concepts for me this week are the marginal revenue and marginal cost approach to better understand the concept khanacademy.org provides a video that thoroughly