Answers:
Barriers to entry:
Barriers to entry are a complication which makes it tricky for firms to enter into a market. These barriers could be due to government regulations, start up cost, technology challenges etc.
Examples of barrier to entry:
Economies of scale:
This depicts that firm’s manufacture more than costs fall so it becomes difficult for small firms to enter into market (Saunders & Cornett, 2014).
Brand loyalty:
Few firms enjoys high brand loyalty and thus a new firm have to spent a lot money for promoting their product and create brand loyalty.
Geographical barrier:
Few firms are particular to a convinced area and thus new firms cannot enter into the market till the time they got access into that area.
Market structure:
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Perfect Competition
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Monopoly
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Monopolistic Competition
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Oligopoly
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Number of firms in the market
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Many firms are there in perfect competition. Such as agriculture business.
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Only one firm is there in monopoly market. Such as public utilities.
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Many firms are there in monopolistic competition. Such as retail trade.
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Few firms are there in oligopoly market. Such as oil, steels, computers etc.
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Similarity of products sold
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All products are standardized. As all the firms are selling the same product.
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Unique product is there. As there is only one firm.
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Differentiated products are there as there are many firms with homogeneous and heterogeneous products.
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Products could be differentiated or standardized as firms could produce homogeneous and heterogeneous products.
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Barriers to entry
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There are low barriers in perfect competition market as the entry and exit both are quite easy in this market.
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Very high barriers are there to enter into the market as single firm is there and brand loyalty is there.
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There are low barriers in monopolistic competition market still before entering into the market, patenting and copyright is required.
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High barriers are there to enter into the market as few firms are there and geographical area is the biggest barrier.
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(Froeb, McCann, Ward & Shor, 2015)
Non-price competition:
Non price competition is a form of competition where firms are using factors such as packaging, customer services, delivery etc to enhance thee demand instead of making changes in the price (Peress, 2010). Oligopoly market and monopolistic market experience such competition on huge level in the market.
Market structure:
Coles Supermarket:
Coles supermarkt’s market structure is oligopoly as this is quite 100 meter away from woolworths and products are homogeneous and hetrogeneous both.
McDonalds Restaurant:
McDonald’s market structure is oligopoly as there are other food retail chain also in my city and the products are homogeneous and hetrogeneous both (Hirschey, 2016)
Metro Trains in Melbourne and Sydney Trains:
Metro train’s and sydney trains are having monopoly market structure as both are unique.
National Australia Bank:
National australia bank is monopolistic market strucure as there are many banks in australia and products offered by company is differentiated.
Academies Australasia Polytechnic:
Perfect competetion is there as many companies are there to offer academics services in the nation.
A small stall in one of Melbourne/Sydney’s Sunday markets that sells souvenirs such as wallets, caps, tee-shirts, key chains:
Perfect competetion is there as many companies are there to offer such products in the market (Baldwin & Scott, 2013).
A car workshop or hair salon in your city:
Perfect competetion is there as many companies are there to offer such services in the market.
I phone and Samsung in the mobile phone industry:
Monopolitoc competetion is there as both the companies are offering similar products.
Demand curve:
This diagram depict that such condition occur in perfect market where the price is always stable. This happen due to the fact that the firms are always price taker, industry decides the prices and all the firms follow the same price (Layton, Robinson & Tucker, 2011).
This diagram depict that such condition occur in monopoly market where the changes in price affect the total demand. This happen due to the fact that there are many firms in the market with substitute products so increment in one price makes the customer switch for another product.
Thus it could be said that the price elasticity also get affected due to market structure.
References:
Layton, A., Robinson, T. J., & Tucker, I. B. (2011). Economics for today. Cengage Learning.
Baldwin, W., & Scott, J. (2013). Market structure and technological change (Vol. 18). Taylor & Francis.
Saunders, A., & Cornett, M. M. (2014). Financial institutions management. McGraw-Hill Education,.
Peress, J. (2010). Product market competition, insider trading, and stock market efficiency. The Journal of Finance, 65(1), 1-43.
Hirschey, M. (2016). Managerial economics. Cengage Learning.
Froeb, L. M., McCann, B. T., Ward, M. R., & Shor, M. (2015). Managerial Economics. Cengage learning.
