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Property Economics and Finance 2 Individual Assignment 2 Market Structures Perfect Competition

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Property Economics and Finance 2
Individual Assignment 2
Market Structures
Perfect Competition, Monopolistic Competition,
Oligopoly Market and Monopoly
Noluthando Njumbuxu
217029396
Contents
TOC o “1-3″ h z u Introduction3Perfect Competition…………………………………………………………………………………………………………………………4
Monopolistic Competition…………………………………………………………………………………………………………………4
Oligopoly Market………………………………………………………………………………………………………………………………4
Monopoly Market………………………………………………………………………………………………………………………….….5
Differentiation…………………………………………………………………………………………………………………………………6Section B……………………………………………………………………………………………………………………………………….….6
References…………………………………………………………………………………………………………………………………………7

Introduction
In this exposition, I will focus around market structures. It will be separated into two sections in section 1 I will clarify and talking about the four market structures, to be specific Perfect competition, Monopolistic Competition, Oligopoly and in conclusion Monopoly.
Every one of these market structures will be discussed in depth with examples of the market structures will be given. With respect to how costs are set and how benefits are resolved. The markets demand curves will be illustrated in detailed based on their sales. I will also differentiate the difference between the four market structures
In section 2 I will discuss ”real estate brokerage industry as a monopolistically competitive market structure”. In my discussion, I will give my perspectives and comprehension on this announcement. I will reason my perspective and will give pragmatic cases to help my announcement.

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Perfect competition
Perfect competition is a market structure that comprises of an extensive number of little firms. The item sold in this market are indistinguishable items. This market resembles a sheep rancher. There are no obstructions to section in the ideal rivalry. In the event that you have capital and you need to offer what John’s shop offers you can proceed without anybody’s endorsement. Your costs must be clear and noticeable so your buyers know to do great a correlations shopping and have the capacity to coordinate costs well with your rivals. Therefore, customers will be hesitant to purchase from a provider who charges a value that is higher than a market cost.
There are numerous providers in this market, along these lines it is very simple for new providers to enter this market structure and for others to leave the market structure without influencing the request and supply bend. A provider does not require a lot of funding to begin a business in this market structure. In a flawless similar market, all generation factors are versatile, all venders and purchasers have finish learning of the economic situations. There is no administration intercession to impact the choices of purchasers and merchants and all provider’s demonstration freely CITATION Wil91 l 7177 (William G. Shepherd, 1991).

Monopolistic Competition
Monopolistic rivalry is either commanded by a couple of huge providers or by numerous little providers that offer distinctive scopes of similar items. Numerous providers rival each other in this market structure. The provider’s items contrast marginally however are close substitutes for each other.
A decent illustration I am will utilize its running shoes, we get an extensive variety of running shoes with various names. They all convey a similar administration yet just vary with regards to cost, consumer loyalty, taste, and quality. Take for example the NEW BALANCE running shoe has been utilized by more competitors throughout the years however when ASICS presented its new GEL extend and modernized its sprinters. NEW BALANCE lost more clients and it brought about less benefit for the firm. The activity of ASICS negatively affected the market costs of NEW BALANCE.
Providers in this market contend by delivering preferred items over their rivals. Item separation gives the providers to have control over cost, in the imposing business model market structure. Providers can charge diverse costs for their items to persuade their clients. At the point when more providers enter this market the present providers’ request will diminish CITATION Eni68 l 7177 (Enis, 1968).

Oligopoly Market
An oligopoly advertise exists of few providers which overwhelm the market for a particular item for instance in SA will be the phone system or scope suppliers. These providers are free, as the activity of an individual provider influences its rival’s benefit. That is the reason it is imperative in this market to dependably be vigilant for your rival’s activity and think of a system that will support your firm.
On the off chance that Vodacom raises the cost of its information, MTN and CellC can consider this more as a chance to remove a portion of Vodacom’s piece of the overall industry from it by keeping the costs as they may be. Oligopolist will take after a cost cut however won’t take after a cost increment in a no tricky oligopoly showcase. It turns out to be exceptionally troublesome for these organizations to precisely foresee what their rivals are wanting to do straightaway and this can prompt lower benefits for them. It is unlawful for companies to participate in casual helpful assentation’s to settle evaluating of their administrations. There is lawful methodology that can take to boost benefit one is value authority, this happens when MTN set a cost for calls for every second and whatever is left of the other wireless suppliers will take after. MTN turns out to be consequently the value pioneer. The other system revenue driven expansion is when organizations go into a formal consent to confine the yield and raise costs it is known as a cartel. This system likewise decreases the vulnerabilities among individuals as it fills in as a passage obstruction to new organizations CITATION Jac94 l 7177 (Foust, 1994).

Monopoly Market
An imposing business model alludes to a market structure where one firm controls the whole market. The item it produces is homogenous. They have the market control in their grasp since purchasers don’t have different options. Eskom is a decent case of such a market; it furnishes the entire of South Africa with power. Eskom decreases yield to build costs and more benefit. The administration regularly directs its costs. There is no section for different organizations or it will be extremely hard to enter such a market. The point of imposing business model is to expand benefit by the limiting its cost.
The request bend for states of this market is downwards slanting in light of the fact that an imposing business model firm needs to boost amount. Subsequently, a lessening in value level outcomes in the bend slopping downwards CITATION Eni68 l 7177 (Enis, 1968).

Differentiation
Market structure How many firms Product type Market entry/exit Profits
Perfect competition Large number of small firms Completely homogenous goods Free entry and exit No impact on market price
Monopolistic competition Large number of small firms Differentiated products Free entry and exit All firms maximize profits
Oligopoly Small number of firms Homogenous or differentiated Barriers to enter and exit All firms Maximizes profits
Monopoly One firm High barriers to entry and exit Maximizes profit
Section B
”The property market in SA is often considered to be a monopolistically competitive market structure. More specifically, the real estate brokerage industry (Estate Agency industry) fits the model of monopolistically competition quite well.”
I completely concur with the previously mentioned explanation that the Real estate industry falls under the monopolistically aggressive market. I might want to initially give my comprehension of real estate industry. I trust this industry is an industry where diverse properties are sold and leased. Presently, this industry splendidly fits the imposing business model market structure, since there is an expansive number of firms in the business like Pam Golding, SEEFF, Rawson to give some examples. ‘An expansive number of firms’ is one of monopolistically aggressive markets highlights which best portrays the land advertise. These organizations or firms contend with each other for the quantity of offers made in a month to month, quarterly or even yearly or in which area. Properties are otherwise called a sanctuary since it gives asylum to individuals living in it. In this sense I am meaning whatever property you buying the primary thought are for that working to give safe house to you.
Each of these monopolistically organizations offer comparative however marginally separated properties (items). All the previously mentioned organizations do offer business properties, ranches, horticultural homesteads and private properties and inside private properties, we get an extensive variety of two-room house, single man level, cabin house, and so on. The property market is a standout amongst the most mainstream advertises that are open for new providers and organizations particularly the land business industry expands its benefits and doing great in the previous years. In the event that another property organization needs to join this industry it can don’t hesitate to enter the market since there are no limits to enter the market, this additionally applies when a company needs to leave the market. Land industry will become greater in light of the fact that its organizations acquire a considerable measure of benefit and this will result in new organizations to enter.
Real estate companies will dependably be in the monopolistically focused industry since they can charge diverse costs without having a dread to lose their clients. They will always be creating separated items in light of the fact that heterogeneous is a character of property
References BIBLIOGRAPHY Bridges, T. (March). Before Bailling Them Out, Plug the Leaks. Washington POst National Weekly Edition, 3.

Enis, B. &. (1968, May 10). Different products, similar strategy. Marketing of services, pp. 3-17.

Foust, J. B. (1994). Doing Business in the Economy in Transition . Chicago: Midwest Economic Association .

William G. Shepherd. (1991). Public Policy toward Business, 8th edition. Boston: Irwin.

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