Market Structures And Ideal Pricing Strategies - 1885 Words

Abstract Market Structures are determined by the types of firms that are in them. Different firms have different characteristics that make them ideal for different structures. Several factors come into play n determining which market structure a firm belongs to; a firm without competition and can determine prices and output is automatically in the monopoly market structure. Smaller, multiple and similar firms are in a perfectly competitive market and so on. Different market structures employ different pricing strategies. These market structures and their ideal pricing strategies are described below. 1. Perfect Competition†¨ 1.1. Description†¨ This is a market structure which is characterized with numerous firms that are almost equal in strength and none can therefore influence that price that the said market structure. This means that in this market structure the price of products is determined by normal market forces such as demand and supply (Morris Morris, 1990). A perfect competition market therefore has the following characteristics; a large number of firms that have equal power. Another characteristic of perfectly competitive markets is that there are no barriers of entry or exit. Third, the firms are likely to trade in the same variety of products and the only competition is competition based. When it comes to the prices in this market structure, both companies and the consumers are both price takes and since none of them can determine the price of aShow MoreRelatedMarket Structures and Competitive Strategies1193 Words   |  5 PagesMarket Structures and Competitive Strategies ECO/365 Market Structures and Competitive Strategies Introduction There are many other soft drink makers but Coca Cola has been renowned to be one of the world’s top best soft drink makers and is among the best brands ever for a lot of years. It has the gain of a marketplace leader spot in drinks dealing with Pepsi in the subsequent spot. 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