Question

How do businesses operate differently based on the market structure they fall in?

Answer 1

As we know that there are different market structures. Each and every market structure has its own advantages and disadvantages as well. One market has features, which other market is lacking off. The four basic types of market structures are: perfect competition, monopolistic competition, oligopoly, and monopoly. Each of them has its own set of characteristics and assumptions, which in turn affect the decision making of firms and the profits they can make. It is important to note that not all of these market structures exist in reality; some of them are just theoretical constructs. Nevertheless, they are critical because they help us understand how competing firms make decisions.

Business operations as we know is everything that happens within a company to keep it running and earning money is referred to collectively as business operations. Each and every business operation is based on different market strucrure. Some business operations fall under perfect competition, oligopoly, monopoly and monopolistic competition.Business operattions around the world are mainly influnced by monopolistic and oligopoly market structures. In Monopolistic market structures the business operations are largely engaged in product differentiation. The business firms are highly making there products differetiated from other firms products. For example the mobile manufactur comapanies falls under monoploistic competitiion.

The type of market influnces the profits and demand of the business operation. If the business operation is having the monopoly marrket structure, than it will have its own policies and strategies to iinflunce the market. Under perfect competition the business operation has infinite number of buyers and seller. Non of the buyer or seller can influnce market price. They have to take the price as set by the markets. If the business operation is having the Oligopoly than there are a handful of producers and they have their influnce on the business operations. So, we can say that each and every business operation falls under certain market structure and that market structure affect the decisions of that besiness operation.

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