Market Structures and Pricing Strategies Essay Example | Topics and Well Written Essays - 2750 words

Market Structures and Pricing Strategies - Essay Example The basic understanding underlining the case study is that the four basic structures are perfect competition, monopoly, monopolistic competition and oligopoly. Perfect Competition and Monopoly are the extreme forms and most of the markets in existence lie between the two extremes. It has been observed by economists that perfect competition and monopoly are theoretical. During 1930s Edward Chamberlin of Harvard University and Joan Robinson of Cambridge University tried to make the study of market structures more realistic. The structure they analyzed is called monopolistic competition. â€Å"The concept of perfect competition was first introduced by Adam Smith in his book "Wealth of Nations". Later on, it was improved by Edgeworth. However, it received its complete formation in Frank Kight's book "Risk, Uncertainty and Profit".† Perfect competition is the market structure where you have large number of buyers and sellers. The sellers sell identical products. An example of Perfe ct Competition is the market of bathing soaps. Key characteristics of Perfect Competition are 1. Knowledge is freely available 2. No barriers to entry 3. Firms produce identical products 4. No single firm can influence the price. The firm is the price taker and the price is determined by the industry demand and supply. 5. There are large number of firms in the market 6. The motive of the firms is profit maximisation Monopolistic competition and Oligopoly lie between the two extreme market structures of Perfect Competition and Perfect Monopoly. ... Later on, it was improved by Edgeworth. However, it received its complete formation in Frank Kight's book "Risk, Uncertainty and Profit" (1921).† As stated on : http://economicsconcepts.com/perfect_competition.htm Perfect competition is the market structure where you have large number of buyers and sellers. The sellers sell identical products. An example of Perfect Competition is the market of bathing soaps. Features of Perfect Competition: Key characteristics of Perfect Competition are 1. Knowledge is freely available 2. No barriers to entry 3. Firms produce identical products 4. No single firm can influence the price. The firm is the price taker and the price is determined by the industry demand and supply. 5. There are large number of firms in the market 6. The motive of the firms is profit maximisation 2. Monopolistic Competition Monopolistic competition and Oligopoly lie between the two extreme market structures of Perfect Competition and Perfect Monopoly. What is Monopoli stic Competition? In this market structure, there are many buyers and sellers, like in a perfect competition. However, the products are more differentiated. An example could be Restaurants, where every restaurant may specialize in a different cuisine. As Karen Collins puts it in the book Exploring Business, â€Å"Products can be differentiated in a number of ways, including quality, style, and convenience, location, and brand name.† Features of Monopolistic Competition: The Key features of Monopolistic Competition as mentioned in the book â€Å"Economics: Principles and Policy† by William j. Baumol and Alan S. Blinder are: 1 Large number of buyers and sellers 2 Freedom of entry and exit 3 Perfect Competition 4 Heterogeneous

Forces in International Business Research Paper

Forces in International Business - Research Paper Example The business environment is indeed inundated with waves of issues that totally define the nature of operations. This mix translates to what is referred to as the business environment. The forces that define the business environment normally range in various aspects as can be realized in the modern age. Some of these factors can be controlled by the business whereas others are beyond the manipulation of the business. These factors are the core subject matter in this essay. It seeks to address how the external environmental forces influence operations. FORCES IN INTERNATIONAL BUSINESS Introduction The modern business environment is defined by myriad factors that vitally influence the operations of all players in market. ... In most cases, some of these factors affect the organizations directly while others impact indirectly on the organizations. In that manner, the modern business environment is classified into; internal environment, operational environment and external environment. The first two classifications are normally a function of the organization’s own operations and can therefore be influenced whereas the external environmental factors are broad in scope and cannot easily be manipulated by the operations. Economic environment The economic business environment usually refers to the combination of the nature of economic system prevailing in the country of operations, the anatomical structure of the economy in terms of economic policies, the government’s regulation of the capital markets and such other factors as the socio-economic infrastructure. Such market situations are normally great determinants of the success or failure of entirely all organizations (Becker, 2001). In any cas e, a supportive economic environment is the best condition an organization may imagine. Most multinationals today operate in entirely different economic systems from their home countries and are as such usually compelled to adapt to the conditionality in existence. In many countries, governments in place have tried to promote investment activities though the creation of favorable economic environments that support the operations of investors. The economic systems in many countries differ in many respects and this has a great influence on investment viability. The economic systems in the Eastern countries are totally different from the systems in the Western economies.