The Power of Big Three in the Philippines
The Power of Big Three
By: Prof. Antonio E. Casurao, Sr.
Under the free enterprise economy, we shall find four basic market structures that will determine the characteristics of a certain industry in terms of market share, pricing, products and competition. This particular discussion which will tackle about the four basic market structures, will start from the most free enterprise market to the most controlled one. Towards the end, it will focus on the oligopolistic market structure.
Basically, the four market structures are the pure competition, oligopolistic, monopsony and monopolistic. Pure competition is characterized by a market where there are many buyers and sellers. There is stiff competition in this market structure where sellers can offer products and services to the market that are competitive either in quality or price, or a combination, depending on the response of the buyers. Buyers on the other hand, can exert their power by dictating the price. If there are many available products or services, buyers can choose for those with best price offer and the best quality. Therefore a large “substitution effect” will happen, wherein the many alternative products will be purchased. Sellers and producers respond to it by improving the quality or lowering the price. The market forces under the law of supply and demand effectively work in this structure. The prices are usually elastic as its response to the demand. Businesses under this category are easier to enter, but they should be weathering the competition. Products are those that are needed basically by the majority, like that of fast moving manufactured goods.
The second market structure is the oligopolistic structure. This is characterized by a market wherein there are many players but there are only few who appear to have gained the major market share and their names became a byword in the market. This will be discussed in details below.
The third market structure is
By: Prof. Antonio E. Casurao, Sr.
Under the free enterprise economy, we shall find four basic market structures that will determine the characteristics of a certain industry in terms of market share, pricing, products and competition. This particular discussion which will tackle about the four basic market structures, will start from the most free enterprise market to the most controlled one. Towards the end, it will focus on the oligopolistic market structure.
Basically, the four market structures are the pure competition, oligopolistic, monopsony and monopolistic. Pure competition is characterized by a market where there are many buyers and sellers. There is stiff competition in this market structure where sellers can offer products and services to the market that are competitive either in quality or price, or a combination, depending on the response of the buyers. Buyers on the other hand, can exert their power by dictating the price. If there are many available products or services, buyers can choose for those with best price offer and the best quality. Therefore a large “substitution effect” will happen, wherein the many alternative products will be purchased. Sellers and producers respond to it by improving the quality or lowering the price. The market forces under the law of supply and demand effectively work in this structure. The prices are usually elastic as its response to the demand. Businesses under this category are easier to enter, but they should be weathering the competition. Products are those that are needed basically by the majority, like that of fast moving manufactured goods.
The second market structure is the oligopolistic structure. This is characterized by a market wherein there are many players but there are only few who appear to have gained the major market share and their names became a byword in the market. This will be discussed in details below.
The third market structure is