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What power do consumers hold?
Consumers can sometimes hold lots of power and sometimes very little. For example, in a captive market the consumer holds little power.
What does a perfectly competitive market consist of?
It means that no enterprise (or economical agent) that participates in the market is able to have an effect, through their practices, in the final price of the products. The price is set by the market. That's because they don't hold a big enough percentage of the market. Thus a perfectly competitive market consists of a group of individuals and firms trading many goods and services
When the process of entry or exit ends in a perfectly competitive market?
The idea of a perfectly competitive market is that no one business or entity is large enough to hold power over a market or product. Zero entry and exit barriers make this possible, because it means that the market is ever changing as businesses fail and new companies emerge.
What Two features of monopolistic competition?
· Two firms in the industry · Strong control over price. · Uses Non price competition to compete · Very strong Barriers to entry Note. a pure dupoly very rarly occurs in real life the more common is two dominate firms who hold majority of the market share.
What is a oligopolies?
An oligopoly is an economic condition in which there are so few independent suppliers of a particular product that competitive pricing does not take place. Oligopoly is a form of market where there is domination of a limited number of suppliers and sellers called Oligopolists. A situation in which a particular market is controlled by a small group of firms.An oligopoly is much like a monopoly, in which only one company exerts control over most of a market. In an oligopoly, there are at least two firms controlling the market. An oligopoly is a market dominated by a few large suppliers. The degree of market concentration is very high. Firms within an oligopoly produce branded products and there are also barriers to entry. Another important characteristic of an oligopoly is interdependence between firms. This means that each firm must take into account the likely reactions of other firms in the market when making pricing and investment decisions. This creates uncertainty in such markets - which economists seek to model through the use of game theory. The retail gas market is a good example of an oligopoly because a small number of firms control a large majority of the market. Economics is much like a game in which the players anticipate one another's moves. Game theory can also be applied in this situations as if decision makers must take into account the reasoning of other decision makers. It has been used, for example, to determine the formation of political coalitions or business conglomerates, the optimum price at which to sell products or services, the best site for a manufacturing plant, and even the behavior of certain species in the struggle for survival.The ongoing interdependence between businesses can lead to implicit and explicit collusion between the major firms in the market. Collusion occurs when businesses agree to act as if they were in a monopoly position. KEY FEATURES OF OLIGOPOLY - A few firms selling similar product - Each firm produces branded products - Likely to be significant entry barriers into the market in the long run which allows firms to make supernormal profits. - Interdependence between competing firms. Businesses have to take into account likely reactions of rivals to any change in price and output THEORIES ABOUT OLIGOPOLY PRICING There are four major theories about oligopoly pricing: (1) Oligopoly firms collaborate to charge the monopoly price and get monopoly profits (2) Oligopoly firms compete on price so that price and profits will be the same as a competitive industry (3) Oligopoly price and profits will be between the monopoly and competitive ends of the scale (4) Oligopoly prices and profits are "indeterminate" because of the difficulties in modelling interdependent price and output decisions Distinct features of an oligopolistic market: - An oligopolistic market comprises a handful of firms, engaged in selling analogous products - All oligopolistic markets increase mutual dependence among the firms involved in similar competition. It also prepares businessmen to accept the outcomes arising from rivalries with respect to alterations in the production and prices of goods. - In near future, an oligopolistic market is likely to impose restrictions on admission, in an attempt to incur abnormal profits. - Each of the business houses involved with this market produces branded goods THE IMPORTANCE OF PRICE AND NON-PRICE COMPETITION Firms compete for market share and the demand from consumers in lots of ways. We make an important distinction between price competition and non-price competition. Price competition can involve discounting the price of a product (or a range of products) to increase demand. Non-price competition focuses on other strategies for increasing market share. Consider the example of the highly competitive UK supermarket industry where non-price competition has become very important in the battle for sales - Mass media advertising and marketing - Store Loyalty cards - Banking and other Financial Services (including Travel Insurance) - In-store chemists / post offices / creches - Home delivery systems - Discounted petrol at hyper-markets - Extension of opening hours (24 hour shopping in many stores) - Innovative use of technology for shoppers including self-scanning machines - Financial incentives to shop at off-peak times - internet shopping for customers Price leadership: Oligopolistic market The dominance of one firm in the oligopolistic market results in price leadership. Firms having less market shares only follow the prices fixed by leaders. Oligopolistic competition: Effects - Oligopolistic competition in most cases leads to collaboration of the business firms on issues like raising the prices of various goods and subdue production process. - Under other given market conditions, the competition between the sellers acquires a violent form, on the grounds of lowering the prices and increasing the production. - Collaboration of various firms also brings about stabilization in the unsteady markets. PRICE LEADERSHIP IN OLIGOPOLISTIC MARKETS When one firm has a dominant position in the market the oligopoly may experience price leadership. The firms with lower market shares may simply follow the pricing changes prompted by the dominant firms. We see examples of this with the major mortgage lenders and petrol retailers. In reality, it is the Oligopoly market which exists, having a high degree of market concentration. This indicates that a huge percentage of the Oligopoly market is occupied by the leading commercial firms of a country. These firms require strategic planning to consider the reactions of other participants existing in the market. This is precisely why an oligopolistic market is subject to greater risk of connivances.By: Schafaq ChohanAn oligopoly is a market form in which a market or industry is dominated by a small number of sellers. Barriers to entry are high.
What power do consumers hold?
Consumers can sometimes hold lots of power and sometimes very little. For example, in a captive market the consumer holds little power.
Why firms hold cash?
there are basically three reasons why firms hold cash, namely speculation precaution transaction
What does a perfectly competitive market consist of?
It means that no enterprise (or economical agent) that participates in the market is able to have an effect, through their practices, in the final price of the products. The price is set by the market. That's because they don't hold a big enough percentage of the market. Thus a perfectly competitive market consists of a group of individuals and firms trading many goods and services
Is a basket a frame structure or a shell structure?
It is a shell structure so that it can hold stuff.
What is a structure that hold seeds?
the emryo
What ancient Greek structure could hold up to 14000 people?
What structure in ancient Greece could hold 14000 people
Why do animals have bones?
structure to move around and to hold organs in place.for structure to move around and hold organs and more in place.
What is a structure built across the water to hold water back?
A dam is a structure built across the water to hold water back.
Who hold the power for democracy?
The people hold the power in a democracy.
What does story structure mean?
structure means what hold the hole story together
How does a floor help a structure?
It helps to hold a structure so it will not sink to the ground.
What is the structure that hold bones together?
drugs
