How do the different market structures like monopolies, duopolies affect the prices of different items we...

How do the different market structures like monopolies, duopolies affect the prices of different items we buy?

Solutions

Expert Solution

Soln. Market structure does affect the pricing strategy of the product but organizations are not so free to set any price of the product as per their choice. There are some binding criteria, that they need to take into consideration before setting up the price of the good. In duopolies market, price of the goods set depends on the quantity of the goods produced by respective firm and based on the quantity, they decide the price. In perfect competitive market, every firm has to set the equal price for similar products to maintain the market equilibrium. In oligopoly market firms decide the price by dividing the demand and setting the price accordingly. In monopoly market, due to lack of competition, firm is free to set the price as to maximize the profit. Based on the market structure, firms set the price and to derive profit and profit is not the only criteria that decides the price of the good.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

What are the segmented structures (i.e., different prices to different buyers for different applications) that affect...

What are the segmented structures (i.e., different prices to different buyers for different applications) that affect strategic pricing? What roles do price-offer configuration, price metrics, price fences and gain-loss framing play in segmented structures, and how do they affect a pricing decision? Explain your answer.

When analyzing the different market structures, we have learned that the demand curve faced by a...

When analyzing the different market structures, we have learned that the demand curve faced by a perfectly competitive firm is different from that faced by a monopoly? How do the two demand curves differ? How does that affect pricing policies?

Why do we, as consumers, prefer the prices found in competitive markets? How are the prices...

Why do we, as consumers, prefer the prices found in competitive markets? How are the prices in perfectly competitive markets determined? Explain, Which of the four market structures that we covered is most profitable for the firm? Is this the best market structure for consumers? Why or why not? Explain. We've made a pretty big deal about the differences between fixed and variable costs. Why does variable cost change as output changes? From your perspective as a manager, why is...

What are post-translational protein modifications? How do they affect protein structures and functions? How can they...

What are post-translational protein modifications? How do they affect protein structures and functions? How can they be measured (name at least two ways)? Why should we care about them (hint: there are likely a few reasons; tell me about all of them)?

How would different portfolio management affect the efficient market hypothesis。

Why monopolies arise and what governments can do in face of monopolies? Explain briefly how the...

Why monopolies arise and what governments can do in face of monopolies? Explain briefly how the price floor works in a market if the government applies it. Use a specific real life example to argue for the application of it.

How do costs affect the pricing strategy in a foreign market?

How do firms in an oligopoly market structure set prices and output?

How do different assumptions about network usage affect ROI? Do they affect the cost of the investment or the amount of the return?

This chapter discusses "Firms in a competitive market," concepts like monopolies, etc. 3) Determine whether the...

This chapter discusses "Firms in a competitive market," concepts like monopolies, etc. 3) Determine whether the following statements are true or false. Explain your answers. a) A firm will make a profit when the price it charges exceeds the average variable cost of the chosen output level. b) To maximize profits in the short run, a firm must minimize its costs. c) if economic profit is positive, firms will exit the market in the short run d) A firm that...

Subjects