Diapositive 1

Market Structure and Competition

Read the statements and decide if they can relate to: 1.Market Leaders, 2.Market Challengers, or 3. Market Followers

a.This is often the first company to have entered the field, or at least the first to have succeeded in it.

b.It can either attempt to attack to leader, or to increase their market share by attacking various market followers

c.They often concentrate on market segmentation: finding a niche in the market that is not satisfied by other products.

d. Their narrow range of customers causes problematic fluctuations in tunrover and profit.

e.They often try to increase their market share or at least protect the current one. One way to do it is to try to find ways to increase the size of the entire market.

Answer key

• A. market leader
• B.Market challenger
• C.Market follower
• D.Market follower
• E.Market leader

Types of Competition

1.Oligopoly

2.Perfect competition

3.Monopolistic competition

4.Monopoly

5.Monopsony

6.Natural Monoploy

a.Exists because of the high fixed or start-up cost of conducting a business in a specific industry, or sometimes because of the availability of unique basic materials, technology.

b.Combines elements of monopoly and perfect competition. There are numerous competitors but the difference is that each competitor is sufficiently differentiated from the others that some can charge greater prices. (music industry)

c.Is the exact opposite of perfect competition. There is one producer of a particular product and generally no reasonable substitute

d.There is usually one buyer for a particular product

e.Similar to monopoly, there is a few number of producers that dominate the majority of the production in the market system

f.Is a market system characterized by many different buyers and sellers, with the big number of buyers and sellers, it is impossible to change the price