Question

At the beginning of the semester, you identified the healthcare industry, energy industry, financial industry, or a technology industry and a publicly-traded company to think about as part of your final project or other course work. Some of that analysis begins now.

1. (5pts) For your industry/company what are the major goods and services markets (final products) & factor markets (production inputs and/or intermediate goods and services) that characterize their business?

2. (5pts) Briefly (200 words or less) offer some thoughts about what you feel are the major risks faced in both the final goods market, and the factor markets in which your industry/company participate.

3. (5pts) Look up the definitions of Perfect Competition, Monopoly, Oligopoly and Monopolistic Competition. Based upon what you learn, which of these types of competition and market structure best describe your industry and/or company?

Answer 1

a.Healthcare Industry

Under healthacre industry i would like to opt for pharmaceutical sector. Under this sectior the main or final product will be medicinal drugs and supplies like syringes,glucose botles,etc. And my factor market will be market related to salt for medicines and all other materials for supllies like rubbers,palstic, glass,etc.

b.There are many risks-

Competitors- Presence of established competitirs in the industry which will make it diificult to gain stability in the market.

Substitution effect- Now and then with introduction of new salts or substitutes the market has become highly volatile.

Procurement of Raw Material- Due to high demand procurement of raw materials can be tough.

Loyalty of Consumers- As there are a lot of options for consumers to choose from, the consumers loyalty for a particular medicine of a company is very unpredictable.

c. Pharmaceutcal industry exhibits a oligopoly competition situation as there are alot of barriers for entry in the pharmaceutical industry like registrations, licensing of drugs, a lot of official paperwork,etc.Secondly, pharmaceutical certainly shows interdependance of companies on one another in terms of new products,price variations and so on.

Note- Pharmaceutical industry is amongst the top 10 industries which have high number of barriers for the entry in respective industry.