Maximizing Profits in Market Structures - 1287 Words

Assignment: Maximizing Profits in Market Structures 1 What are the characteristics of each market structure? A competitive market is many sellers that sell similar products with very little control over the market selling price. An example of competitive market structure is a gasoline station. There can be many gasoline stations in a certain mile radius, the more gasoline stations there are in a small area the higher the competitive the market. Monopolies: Monopolies are a group of business people who act as one. Considerable power is in the company’s ability to set and influence prices. The power is determined by the demand curve cladding the company and with almost no competition. Monopolies have no public ownership.†¦show more content†¦The steeper the demand curves the better the discretion in pricing. Some businesses, during the day to day running of business, may choose to have a nonchalant or unconcerned approach to its competitors, ignoring the competitors’ market-related decisions can have detrimental consequences in securing the businesses’ place in the market structure is disadvantages, depleting instead of maximizing its profit and revenue. Managers must be diligently aware of their company’s competition at all-times to maximize profitability possibilities. â€Å"Managers, of oligopolistic competitive firms may engage in open price (or design-, service-, promotion-) warfare or othe r predatory or even criminal behavior to the end of eliminating competitors so that monopoly (or more-limited oligopoly) position can be achieved (Chapter D4, Oligopolistic Competition). What are the barriers to entry, if any? Competitive Competition market is the heart of the capitalist economy. Various levels of competition set the market structure. Monopoly and Oligopoly are the elements of a competitive market. Assignment: Maximizing Profit in Market Structure 5 Monopoly Monopolies have effective barriers to entry because they have certifications, franchises; patents and trademarks that make it difficult for competitors to enter a certain market. Exiting and dissolution are always achievable. Sellers are few and areShow MoreRelatedMaximizing Profits in Market Structures Paper1129 Words   |  5 PagesMaximizing Profits 1 MAXIMIZING PROFITS IN MARKET STRUCTURES PAPER Maximizing Profits in Market Structures Paper Sharon Ballard XECO/212 Michelle Council November 7, 2010 Maximizing Profits 2 Maximizing Profits in Market Structures Paper The structure of a market is defined by the number of firms that are competing in that market, along with factors such as: the ways in which these firms are alike or different, andRead MoreMaximizing Profits in Market Structures Essays1238 Words   |  5 PagesMaximizing Profits in Market Structures Maximizing Profits in Market Structures Competitive Markets The basic characteristics of a competitive market are one of many suppliers provides basically the same goods or services. There are so many suppliers and so many consumers that one supplier alone cannot influence the market prices. Each supplier, or price taker, is at the mercy of the current market conditions at any given time. (N. Gregory Mankiw, 2010, p.290).ThisRead MoreMarket Structure and Analysis 996 Words   |  4 PagesThere are a few different market structures, competitive market, monopolies, and oligopolies. According to Mankiw (2007) competitive market, also known as monopolistic competition or â€Å"perfectly competitive market† is defined as â€Å"a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker† (Pg. 290). In this market structure there are two characteristics: there are many buyers and many sellers in the market and the goods offered by the various sellersRead MoreMain Factors of Product Pricing in the Uk1416 Words   |  6 Pagescharge a profit-maximizing price where price is determined when marginal cost equals marginal revenue. They operate to seek a maximum return on the investment and costs they have input. 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