Market Structures and Relating Pricing Strategies Essay

Market Structures and Relating Pricing Strategies Abstract This paper analysis’s the four categories of the market structure; perfect competition; monopolistic competition, oligopoly and monopoly marketing structures. It will also provide pricing strategies as they are specifically related to each market structure. Each market structure possesses it own unique pricing structure that every business follows to achieve its maximum profit. Some market structures pricing strategies are simple and straightforward while others can be complex. This paper exams how each market structure functions in the business world and how businesses set their pricing strategy. The case study also provides a real world example of a†¦show more content†¦Because it must share the market with a greater number of competitors, the typical firm will find that demand for its product will be reduced: that is, its demand curve will shift to the left.† As business and firms begin to incur loss in a monopolistic competition market business and firms ten d to withdraw causing the demand curve to shift to the right. For the businesses that stay the less competition the better the changes of realizing a profit. [pic] Short-run equilibrium [pic] Long-run equilibrium Some examples of a monopolistic competition are the book, CD, movies, and restaurants etc. These products can be placed in â€Å"product groups.† Product group are â€Å"collections of similar products produced by competing firms. For instance, â€Å"designer dresses† would be a typical product group,† (Samuelson, 2012) Businesses in the oligopoly market are price setters due to the small number of competition within the market. In the Oligopoly market businesses are interdependent and therefore must monitor each other in order to react to any action that may cause a change in price. The influence among these businesses is critical to survival. The entry barriers for oligopoly market are high which prevents outside businesses from easily entering this market due to attractive profits. According to Samuelson and Marks â€Å"An oligopoly is a market dominated by a small number of firms, whose actions directly affect one another’s profits.† Even Show MoreRelatedAnalysis of Market Structures and Pricing Strategies Essay1114 Words   |  5 PagesAnalysis of Market Structures and Pricing Strategies The markets today are so complex and deal with so many variables it can be difficult to understand just exactly how they operate. In the following I will reveal the different kinds of market structures along with their different pricing strategies. Relating to these topics, I will focus on the importance of cost, competition and customer. 1. Analysis of different market Structures DifferentRead MoreEconomic Analysis of an Oligopoly Market Structure1715 Words   |  7 Pagessmall retailers in a market subjugated by the financially dominant oligopolies, Woolworths and Coles. 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