A perfectly competitive market has three main characteristics; there are many buyers and sellers, goods are homogenous and there is free entry and exit into and out of the market. The reason to there being many buyers and sellers is because perfectly competitive firms operate at an efficient scale, which means a high consumers surplus, and because sellers can sell as much quantity as they like at the given market price. It's not desirable for sellers to decrease the price of their goods as this would reduce their profits, they also have no incentive to increase prices as this would lead them to have no demand, as consumers have perfect market knowledge and are able to purchase close substitute goods. Each firm operating in this market is known …show more content…
Monopolists are able to maximize their profits by selling a quantity of their good where marginal costs is equal to marginal revenue, but set a price where this equilibrium meets the demand curve. However, a monopolist isn't desirable for consumers as they create a deadweight loss. (Shown below)
The third type of market structure is an oligopoly. This type of market can be seen as being imperfect (where as a monopoly and competitive markets can be seen as being perfect). There are only a few sellers who dominate this type of market, all of which sell similar goods- an example being supermarkets, which are dominated by Tesco, Sainsburys and ASDA. All of these firms could be seen as being price makers, therefore any action by one of the firms can affect the levels of profits for all the other firms operating in that market.
Firms operating in this market would be able to profit maximize if they tried to act like a monopoly market structure. Although, this may involve collusion which is seen as becoming efficient, but antitrust laws are set in place to prevent this from happening.( An example of collusion within supermarkets, was when they agreed to price fix milk in 2007.) However, because firms are not allowed to agree on prices and quantities of goods, firms in a oligopolistic market aim to increase their market share and become market leader, therefore they increase their output which has the effect of reducing prices. This means they are unable to profit
1. The competition Act is a Federal Statue that stimulate the competition in the market. It is of interest to business, because it gives opportunities to new businesses and entrepreneurs to enter the marketplace. Also, it helps to eliminate the monopoly companies by bringing new ideas and diversity of products. In addition, it helps small businesses against the big companies who goes against them.
When firms have such power, they charge prices higher than they can
Even further, these robber barons would often ruthlessly eradicate competition by buying out other companies to establish monopolies through the horizontal and vertical integration of production and product.
The market revolution, which started in 1815, transformed worker lives, and improved the nation vastly; although it also dropped the economy as well. The traditional market, which was based upon power generated by animals and water, was slow in activities such as transportation. The growing nation underwent peace, which then catalyzed the reform of the organization of the economy. As such, transportation was heavily improved upon, along with manufacturing, banking, and commercial law. However, there were also two panics during the time that occurred that led to many Americans who were anxious and uncertain about working in the country.
The Market Revolution was a game changer for America. It changed the lives of Americans, especially farmers. It allowed farmers to grow what they did best and bring to the market to sale and be able to purchase things they were unable to grow. The Market Revolution was made up of three parts: transportation and communication, transition to commercialized revolution, and industrialization. This brought on a social change, Transportation and communication were a big art of the Market Revolution and couldn’t have happened without it.
While the market for any type of good, service, resource, or commodity could, in principle, function as monopsony, this form of market structure tends to be most pronounced for the exchange of factor services. Characteristics of a monopsony market: a) Single buyer: It is the only buyer in the market. As the only buyer of the market, monopsony controls the demand-side completely. b) No alternative buyers: Monopsony attains the single buyer status because sellers have no alternative customer.
Market Structure - Oligopoly Oligopoly is a market structure whereby a few number of firms owns a lion’s share in the market. This market structure is similar to monopoly, except that instead of one firm, two or more firms have control in the market. In an oligopoly, there are no upper limits to the number of firms, but the number must be nadir enough that the operations of one firm remarkably influence and affects the others (Investopedia, 2003). The Walt Disney Company is categorized under an oligopoly market structure.
Furthermore, customers may find lower prices or higher discounts with a small number of firms in the oligopolistic market. The others will also cut prices to prevent losing their market share when a business started to cut down its price. Firms might have to sacrifice some profits in order to keep customers or reduce the rivals while lower prices to benefit consumers. For example, customers can find discounted air fares which allow them to enjoy the best flight deals with Air Asia.
The oligopoly market is set up in a way so that competitors can survive because each is unique and there are so few competitors that they are virtually indispensable even if some ethics atrocity
Many organizations are expands their operations in international markets basically for increasing the revenue by increasing the market penetration. Among the risks available in international market political risk is considered as highly important. The proper identification and measurement abut the key political risk in particular market could help manage them on behalf of overcome or reduce its potential damage. In international market entry methods are highly concerned and the many international organizations uses different entry methods to reduce the risks and complexities in different markets. Franchising is one market entry method that many organizations follow, in service industry franchising plays effectiverole in international marketon
Competition wanted because of the market result it produces efficiency, low prices and innovations. Competition rules limit the freedom of the market players in order to protect the process of competition, at the same time it preserves freedom of others
The four building blocks of competitive advantage can be used to help a company become more profitable and stay ahead of their competition. The four factors are superior efficiency, quality, innovation, customer responsiveness. All four building blocks are important to any company. However, I believe that customer responsiveness is the most important because having loyal and happy customers can make or break any company. The four building blocks can help companies grow and become the leader in their industry over their rivals.
In terms of controlling, the management of Marks and Spencer has frequent reporting of expenditures with costs to provide a form of feedback. The reactions of managers to such type of data rely on the expectations or the formal budget or planned targets. The management believes in collecting and assigning cost data that is being shifted away from control. There is a recognition related to the repetitive exercise of planning and re-planning for creating a full time job for accountants. The assessment and evaluation of cost data in the aspects of launching new product by Marks and Spencer is about gaining insights and learning ways for achieving the goals of organisation in most effective manner.
Mr Price is known to be the best retail company that has a wide range of products sold in South Africa. They were established in 1885, they have been trading on the JSE since 1952. There are Mr Price stores located all around Africa, such as Botswana, Kenya, Tanzania, Malawi, Namibia and of course in South Africa. The founders Laurie Chiappini and Stewart Cohen opened the very first Mr Price in 1985 in Durban.
This market usually exists when there is only one firm in the sector/industry. A monopoly usually has no close substitutes. For example: a local electricity company, or a railway service in a city. In order for these firms to be able to maintain their monopoly