Differentiating Between Market Structures Essay - 1077 Words

Differentiating between Market Structures The structure of a market is defined by the number of firms in the market, the existence or otherwise of barriers to entry of new firms, and the interdependence among firms in determining pricing and output to maximize profits. The author of this paper will cover: the advantages and limitation of supply and demand identified in the simulation, the effectiveness of the organization in which the author knows, and how the organizations in each market structure maximizes profits. The simulation looks at all four types of market structure within the East-West Transportation Company. The four divisions operate within each of the four market structures. The divisions are Consumer Goods, Coal, Chemical†¦show more content†¦The Forest Product Division operates in the monopolistic competition market structure. A firm operating in monopolistic competition faces a downward sloping demand curve (University of Phoenix, 2008). The effectiveness of Staples Staples operates in the monopolistic competition. Staples carries many different brands and items within the store. Staples, unlike many monopolistic competition companies are concerned about what the major local competition is doing with their prices. Staples hires an outside company to check the different prices on items that they all carry alike, and then they decide to adjust their price accordingly to the research. Since Staples operates in the monopolistic competition, the demand curve faces in a downward slope. The downward – sloping demand curve means that in making decisions about output, the monopolistic competitor will use a marginal revenue curve that is below price. At its profit-maximizing output, marginal cost will be less than price (The McGraw-Hill, 2004). In the monopolistic competition market structure the competition implies zero economic profit in the long run. If Staples shows a profit then the competition in the market will lower the price to increase th eir profits and stop Staples. This would continue until the profits disappeared and the new demand curve is tangent to the new average total cost curve. Market Structure Maximize Profits The goal of a firm is to maximize profits, to get as much forShow MoreRelatedDifferentiating Between Market Structures1766 Words   |  8 PagesDifferentiating between Market Structures Jessika Canales Dà ­az ECO /365 08/28/2010 Instructor: SR. Carlos Mà ©ndez David Differentiating between Market Structures In this simulation, the learner studies the cost and revenue curves in different market structures perfect competition, monopoly, monopolistic competition, or oligopoly faced by a freight transportation company, and makes decisions to maximize profits or to minimize losses. The simulation also deals with the concept of Prisoner’sRead MoreDifferentiating Between Market Structures And The Market Structure1239 Words   |  5 PagesDifferentiating Between Market Structures Arthur Levitt once wrote, â€Å"Our markets have not achieved their greatest successes as a result of government fiat, but rather through the efforts of competing interests working to meet the demands of investors and to fulfill the promises posed by advancing technology.(Arthur, Levitt. (2015)) The competitive nature of an industry is what drives our markets throughout the world. An industry consists of all firms making similar or identical products. McDonald’sRead MoreDifferentiating Between Market Structures1598 Words   |  7 PagesDifferentiating Between Market Structures Jennifer Lavallee ECO/365 May 27, 2013 Market structure is the physical characteristics of the market within which companies react. This means that there are different kinds of market structure based on how companies work together within a particular industry. Location and product have the most to do with determining the market structure. There are four defined market types. The first market structure is called the perfectly competitive market. TheRead MoreDifferentiating Between Market Structures1692 Words   |  7 PagesDifferentiating Between Market Structures Using the virtual organization of Kudler Fine Foods, evaluations will be made to determine market structure and competitiveness. Kudler Fine Foods current strategic plan for 2003, marketing overview, and market surveys will provide information to evaluate how Kudler competes in its market and where its strengths and weaknesses are located. Based on the evaluation of Kudler Fine Foods an applicable market structure will be determined and the structures effectsRead MoreDifferentiating Between Market Structures1924 Words   |  8 PagesDifferentiating Between Market Structures Alana Campbell, Dale Fortune, Katrina Beyah, Leonard Cooper University of Phoenix ECO/212 Principles of Economics Donnetta McAdoo December 5, 2011 Differentiating Between Market Structures To understand the economy of today one must understand the different market structures that make up the economy. There are four market structures that define the economic structure within the world’s economy; perfect competition, monopoly, monopolistic competitionRead MoreDifferentiating Between Market Structures1910 Words   |  8 PagesDifferentiating Between Market Structures Don Peterson ECO/365 February 2, 2015 Elena Zee Differentiating Between Market Structures A market structure in economics describes the state of a market with respect to its competition. There exist several different market structures like perfect competition, oligopoly, and monopolies among others. These markets all produce different types of goods or services, like public and private goods as well as common and collective goods. Firms operatingRead MoreDifferentiating Between Market Structures1134 Words   |  5 PagesDiffereantiating Between Market Structures Identify  the market structure in which this organization competes. Clearly indicate why the market structure was decided upon and how this market structure differentiates from the other alternatives.   MARKET STRUCTURE 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 entryRead MoreDifferentiating Between Market Structures Essay1105 Words   |  5 PagesDifferentiating Between Market Structures ECO/365 Principles of Microeconomics August 30, 2012 Differentiating Between Market Structures Retail sales are indicators of microeconomic conditions presented in a given area at a particular place in time. Since Sam Walton opened his first Wal-Mart store, Wal-Mart has been making ripples throughout the micro economies of America. Wal-Mart’s market structure is typical of most of our nation’s largest corporations in that they are an oligopoly (BrownRead MoreDifferentiating Between Market Structures Essay1260 Words   |  6 PagesDifferentiating Between Market Structures Yvonne C Rivera ECO/365 May 16, 2013 Paul de la Pena Abstract There are many TV service providers available in the U.S; however there are only two companies that offer services via satellite. Dish operates within the monopolistic competition market. Dish has been in business since the early 1980’s and has gradually worked its way up to become one of the leading satellite provider and innovator of new technology. In 2013 they offer service to overRead MoreDifferentiating Between Market Structures in Kudler1022 Words   |  5 PagesDifferentiating Between Market Structures in Kudler ECO365 â€Å"Kudler Fine Foods was established in 1998 when Kathy Kudler fulfilled her vision of establishing her own gourmet food store. The La Jolla store continues to grow while the Del Mar store has been having some difficulties. The store in Encinitas has just opened, but sales seem brisk.† (Apollo, 2011, Strategic Plan, p. 3) The owner works 7 days a week and performs many jobs from purchasing to stocking shelves. Kudler Fine Foods sees