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COMPETITION

COMPETITION. Business Economics. Market Structure. Nature & degree of competition among firms in same industry. Industry - companies engaged in a particular kind of commercial enterprise. Steel Industry Automobile Industry Textile Industry. Four Market Structures. Perfect Competition

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COMPETITION

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  1. COMPETITION Business Economics

  2. Market Structure • Nature & degree of competition among firms in same industry. • Industry - companies engaged in a particular kind of commercial enterprise. • Steel Industry • Automobile Industry • Textile Industry

  3. Four Market Structures • Perfect Competition • Monopolistic Competition • Oligopoly • Monopoly

  4. I. Perfect Competition • Large number of buyers & sellers. • Buyers & sellers deal in identical products. • Each buyer & seller acts independently. • Buyers & sellers are well informed

  5. Perfect Competition • Buyers & sellers are free to enter, conduct, and get out of business. • Each individual firm too small to influence price. • No Advertising • Example: vegetable farming – farmer’s markets.

  6. II. Monopolistic Competition • Large number of buyers & sellers. • Buyers & sellers deal in product differentiation. • Each buyer & seller acts independently. • Buyers & sellers are well informed. • Buyers & sellers are free to enter, conduct, and get out of business.

  7. Monopolistic Competition • Product Differentiation • Non Price Competition • Example: jeans, shoes, sneakers, etc

  8. Oligopoly • Few very large sellers dominate market. • Product may be differentiated. • Sellers act interdependently. • Act together in their pricing behavior. • Compete on a non-price basis • Example: Tobacco, Cereal, Soda, etc

  9. Monopoly • One seller of a particular product. • Types of monopolies • Natural • Geographical • Technological • Government

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