Classification of markets (market structure) and its practical importance. Relate it to the world of real competition with illustrative examples.. Market structure is the characteristics of the market. The major characteristics in describing the market structures are the nature of competition and the mode of pricing in the market. Market structures can also be described as the number of firms in the market that produce identical goods and services. The market structure will influence
Market Structure Firms may operate in different types of market structures with varying degrees of competition. At one extreme lies perfect competition which is a market with the highest level of competition. It is also used as a yardstick to assess other market structures. At the other extreme stands monopoly which represents the absence of competition and the existence of barriers to entry. In between these two extremes lies imperfect competition; these are markets where there is some degree of
resulting literature reflects both the assumptions and the tone of the original dispute between the trustbusters and the defenders of Standard Oil. The reformers' view that the dissolution marked a turning point in the evolution of the modern industry market structure held sway until the 1950s. This was before facing challenge from the careful research of a new generation of "revisionist" business
might receive a lower satisfaction rating than a budget motel—even though its facilities and service would be deemed superior in 'absolute' terms." The importance of customer satisfaction diminishes when a firm has increased bargaining power. For example, cell phone plan providers, such as AT&T and Verizon, participate in an industry that is an oligopoly, where only a few suppliers of a certain product or service exist. As such, many cell phone plan contracts have a lot of fine print with provisions
INTRODUCTION 1.1 Background Growth is essential for a healthy sustenance and survival of any firm in this competitive world. There are two growth routes available to any company: - organic and inorganic. The Theory of the Firm’s Growth Penrose states that the growth rate of the firm will decline with its age. Organic growth beyond certain size or age is a big challenge and hence inorganic growth gains significance. Inorganic growth means growing through mergers and acquisitions. The inorganic growth