The monopolistic market structure of wal mart and its growth in sales and into an oligopoly

Under perfect competition, an inefficient firm is thrown out of the industry. Both a PC and MC firm will operate at a point where demand or price equals average cost.

Monopolistic competition

The entrepreneur has a more significant role than in firms that are perfectly competitive because of the increased risks associated with decision making. Another might take the opposite route, raising the price and using packaging that suggests quality and sophistication.

It has driven smaller retailers out of business, forced manufacturers to be more efficient, often leading to suppliers sending jobs overseas. Since the company does make abnormal profits, it has the power to use quality, materials for its production. The monopoly power possessed by a MC firm means that at its profit maximizing level of production there will be a net loss of consumer and producer surplus.

It also fails to establish the market because most of itare captured by larger firms. The labor force that the firm employs is always learned such that they are able to use the technology.

This is called a Oligopsony and usually allows the buyers to exert a great deal of control over the sellers, often resulting in the depression of prices. With this, Wal-Mart gains abnormal profits in the short term and long term which you can see in the diagram below: Many small businesses operate under conditions of monopolistic competition, including independently owned and operated high-street stores and restaurants.

Walmart is an American multinational retail corporation that operates a chain of discount department stores, warehouse stores, and eCommerce.

Examples of monopolistic competition Examples of monopolistic competition can be found in every high street.

What is Walmart?

Since technology is changing now and then it seems that the company requires keeping on changing the automation for its production process. Read more Monopolistic competition The model of monopolistic competition describes a common market structure in which firms have many competitors, but each one sells a slightly different product.

Because each firm makes a unique product, it can charge a higher or lower price than its rivals. Effects Oligopolies in the retail sector result in increased profits for companies that are part of the market structure because they can raise the prices on their products beyond fair market values.

Human capital differentiation, where the firm creates differences through the skill of its employees, the level of training received, distinctive uniforms, and so on. Some brands gain prestige value and can extract an additional price for that.

Idle capacity under monopolistic competition expenditure leads to unemployment. At this point, firms have reached their long run equilibrium. What are the features of oligopoly? Price competition can involve discounting the price of a product or a range of products to increase demand. Oligarchy is often used to describe theeconomic takeovers by a handful of men of Russia in the early sto the present.

Physical product differentiation, where firms use size, design, colour, shape, performance, and features to make their products different. It has competition such as target.

Oligopoly in Retail Market Structures

The producer can reduce the price of the product instead of spending on publicity. The firm will just employ few individuals who will be taking care of the automated plants which are aimed at improving the production process of products that are provided to the customers.

If idle capacity is fully used, the problem of unemployment can be solved to some extent. Natural Trademarks and patents, combined with expensive advertising campaigns can create natural oligopolies on a national or global scale. The only way Wal-Mart is a monopoly is in their low prices in which no one can beat.

A monopolistically competitive market is productively inefficient market structure because marginal cost is less than price in the long run. Once inside the restaurant, they can view the menu again, before ordering.Market Structure Essay Examples.

17 total results. The Efficiency of Perfectly Competitive Economies. A Description of the Most Markets Classified Into Four Different Market Structure in the United States Economy.

1, words. The Monopolistic Market Structure of Wal-Mart and Its Growth in Sales and into an Oligopoly. words. What is an 'Oligopoly' Oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence.

The concentration ratio measures the market share of the largest firms. A monopoly is one firm, duopoly is two firms and oligopoly is two or more firms.

Monopolistic competition as a market structure was first identified in the s by American economist Edward Chamberlin, and English economist Joan Robinson. Many small businesses operate under conditions of monopolistic competition, including independently.

On the other side, if the oligopoly attempts to raise its price, other firms will not do so, so if the firm raises its price to $, its sales decline sharply to 5, Thus, the members of a cartel can discipline each other to stick to the pre-agreed levels of quantity and price through a strategy of matching all price cuts but not matching any price increases.

Retail market structure refers to the number of companies that sell similar or identical products in the same geographical area. An oligopoly describes a small group of companies that collude to raise prices on products because of excess demand.

competing firms. Hence, market demand falls and becomes more elastic.

Monopolistic Competition

o If profit exit occurs driving up prices and profit. With exit and less competition market demand is split between fewer competing firms. Hence, market demand rises and becomes less elastic.

The monopolistic market structure of wal mart and its growth in sales and into an oligopoly
Rated 5/5 based on 59 review