Market Structures and Pricing Strategies Kiona Thomas American Public University Econ600 Abstract The article analyzes the four main market structures, which are perfect competition, monopolistic competition, oligopoly and monopoly. It provides a detail description of the market, as well as explains the pricing strategy a firm would pursue in that particular market. The article also concludes with a real world example of Visa pricing strategy by examining it oligopoly market structure. Visa
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company is to compete and be profitable because in the free market economy all the company needs is demand for their product. The market structures allowed companies to compete and market their products in four different markets pure competition, pure monopoly, monopolistic, and Oligopoly. Some companies like McDonalds have a strong brand and powerful easy to recognize nationally and internationally. McDonalds have found ways to be more efficient keeping their prices low which ensures their profit in
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markets. One example of this is the housing crisis morphed into a financial crisis since banks held mortgage backed securities and other assets. Irrespective of such seasonal situations, the market should be free for competition and regulate itself only based on the fair and free competition, which sets the best price for the goods and services a buyer pays for depending only on the market supply and demand. Free market system is the best and realistic, which can give the efficient and optimal resource
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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, and political impediments. One of the main obstacles of entry into a monopoly is the fact that one firm has control over the resources
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growth, and both fiscal and monetary policy can help achieve this objective. 5. The fundamental elements are rights to own a business and keep after-tax profits, the right to private property, the right to free choice, and the right to fair competition. They can profit from these by getting extra money after taxes by owning their own property, and have some
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Monopolist corporations maintain high prices, they control the output and usually have little consideration for the end consumer. Most general monopolies typically create a barrier of entry by imposing government policy and patents to keep the competition out of the market. The stake holders involved will be making a profit from both sides instead of one. The change of monopolized and monopoly would be different companies competing for total utility to rise by dropping prices for people to buy
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organizations manufacturing duplicate products, which are similar as well in price. In the market, the performances of single organizations are critically swayed by market structure. Market structure consists of a Monopoly, Oligopoly, Monopolistic Competition, and Perfect Competition structure. These structures affect how market equilibrium is recognized. Monopoly: A monopoly is a firm that has no opponents in its business. It decreases output to increase revenue and increase profits. An example of monopoly
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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
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OLIGOPOLY AND MONOPOLISTIC COMPETITION Up to now, we have covered two extreme types of markets. We covered perfect competition with the highest degree of competition, then we covered monopoly with the lowest degree of competition. Now, we will cover oligopoly and monopolistic competition. These two market types are in between two extremes: they show some features of competition and some features of monopoly. Oligopoly Definition: Oligopoly is a market structure in which there are a few sellers and
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the founder, wants to expand her business in the next 5-10 years. Our group has been hired by her to perform a market analysis, review competitive strategies, and make recommendations on how to maximize profits. Kudler Fine Foods has no direct competition therefor they don’t have the need to compete in their market. This doesn’t mean that they do not have strategies in place to ensure that customers don’t stray to their indirect competitors. KFF is dedicated to expanding their services, enhancing
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