Markets and The Competitive Invironment
MARKETS AND THE COMPETITIVE ENVIRONMENT
Introduction:
The markets in which firms operate vary a great deal. Some are highly comparative, and profits in these markets are half to come by. Some appear to be almost free from competition, and firms in these markets earn large profits. Some markets are dominated by fierce advertising campaigns in which each firm seeks to persuade buyers that it has the best products, and some markets display a warlike character.
So a competitive environment is where there are several similar firms that are competing for the same market segment. These firms normally produce products of the same nature and form and whose uses are more or less the same. However, because of the competition that exists for the market, these firms are likely to differentiate their products to endear them to a larger number of consumers compared to their rivals.
Market Types:
Economics identify four market types. Those are:
1. Perfect competition
2. Monopolistic competition
3. Oligopoly
4. Monopoly
1. Perfect competition:
The degree to which a market or industry can be described as competitive depends in part on how many suppliers are seeking the demand of consumers and the ease with which new businesses can enter and exit a particular market in the long run. The spectrum of competition ranges from highly competitive markets where there are many sellers, each of whom has little or no control over the market price to a situation of pure monopoly where a market or an industry is dominated by one single supplier who enjoys considerable discretion in setting prices, unless subject to some form of direct regulation by the government. In many sectors of the economy markets are best described by the term oligopoly where a few producers dominate the majority of the market and the
Introduction:
The markets in which firms operate vary a great deal. Some are highly comparative, and profits in these markets are half to come by. Some appear to be almost free from competition, and firms in these markets earn large profits. Some markets are dominated by fierce advertising campaigns in which each firm seeks to persuade buyers that it has the best products, and some markets display a warlike character.
So a competitive environment is where there are several similar firms that are competing for the same market segment. These firms normally produce products of the same nature and form and whose uses are more or less the same. However, because of the competition that exists for the market, these firms are likely to differentiate their products to endear them to a larger number of consumers compared to their rivals.
Market Types:
Economics identify four market types. Those are:
1. Perfect competition
2. Monopolistic competition
3. Oligopoly
4. Monopoly
1. Perfect competition:
The degree to which a market or industry can be described as competitive depends in part on how many suppliers are seeking the demand of consumers and the ease with which new businesses can enter and exit a particular market in the long run. The spectrum of competition ranges from highly competitive markets where there are many sellers, each of whom has little or no control over the market price to a situation of pure monopoly where a market or an industry is dominated by one single supplier who enjoys considerable discretion in setting prices, unless subject to some form of direct regulation by the government. In many sectors of the economy markets are best described by the term oligopoly where a few producers dominate the majority of the market and the