Submitted to Submitted by42206(single diploma) – Amal YusupovTable of contentEach branch has its own marketspecificity – the production of various goods, a different industry ofproducers, the size of enterprises, the features of technology, the compositionand specificity of buyers, the specifics of competition.In microeconomics, the mosttypical .market structures are generalized and the behavior ofmanufacturing firms is studied, leading to the receipt of the greatest benefitsfor them-the receipt of the maximum profit. At the heart of these generalizations,specific recommendations are developed that have important applied importancein the choice of the company’s behavior strategy in specific market conditions.
The object of the analysis ofcompetition is the branch. For example, a group of competitors producing goods/servicesand directly competing with each other. The purpose of the analysis is toidentify the competitive advantages of the firm and the choice of a competitionstrategy.There are four main market structures: perfect competition, monopolisticcompetition, oligopoly and monopoly.Perfect competition indicates amarket structure, in which a plenty number of small companies compete againsteach other.
Moreover, firms do not have a significant impact on power of market.Consequently, the manufacture generally produces the absolute l level ofproduction, which in turn lead to market has many buyers and sellers trading identicalproducts so that each buyer and seller is a price taker.Perfect competition relies onthe following elements:· All small firms are focused to maximize profits.· The goods which offered by the different sellers are largely the typical.· There are not specific preferences between different sellers.
It doesnot matter for the customer from which firms buy the products.· All firms have free access and exit to the market.· There is perfect information and knowledge about homogenous products.At present, according to Nelsonstatistics, 3885567619 out of the global population 7519028970 people use theinternet.
Approximately 3.9 billion internet users are both sellers and buyers.The above mentioned example demonstrates that the internet is a market, where amyriads number of consumers/producers operate without any influence on marketpower which in turn lead to equal opportunities in this market, exemplifyingone of the features of perfect competition. Example ofperfect competition. Internetrelated industries. The internet has a strong influence on perfect competitionmarket due to the fact that the internet has made the way of comparison andcheck prices easily, quickly and efficiently (perfect information).Consequently, selling any kinds of good on the internet through a service suchas Alibaba, Aliexpress and E-bay is extremely similar to perfect competition.
For instance, it is becoming more and more popular to use the above mentionedonline magazines to compare prices of any types of product and buy cheaperones.Like perfect competition onlinemagazines namely Alibaba, Aliexpress and E-bay relies on the following elements:· There also a large number of sellers.· Perfect information and knowledge. It is easy to compare the prices of goods.· There are no significant barriers to entry and to exit to the market.
Monopolistic competition is atype of market structure consisting of many small companies that producedifferentiated products and free entry to the market and exit from the market.The products of these firms are close, but not completely interchangeable, itmeans that there is a difference in price, features, branding and marketing.Bydifferentiating the product, the /monopolistic competitor reduces price elasticity.Raising the price, the monopolistic competitor is not deprived of allconsumers, as it happens in the conditions of perfect competition. The marketis somewhat narrowed, but there remain those who steadily prefer the productsof only this manufacturer.
Monopolistic competition relieson the following elements:· availability of many sellers and buyers (the market consists of a largenumber of independent firms and buyers);· free access to and exit from the market (no barriers that keep new firmsfrom entering the market leaving the market);· Differentiated, varied products offered by competing firms. Moreover,products may differ from one another in one or a number of properties (forexample, in chemical composition);· perfect awareness of sellers and buyers about market conditions;· influence on the price level, but in a rather narrow framework Exampleof monopolistic competition:Oneof the most convenient example for the monopolistic competition is washingpowder.Thereare quite a few different companies in Poland such as, Ariel, Tide, Ares,Perwoll, Lenor, Vizir, Perlux, Maxi trat, FF, Persil, Losk, Surf, Bio Power,Origami and so forth. Asa result, forthe production of new varieties of detergent powders it is not required tocreate a large enterprise.
Therefore, if firms producing powders will receivelarge economic profits, this will lead to the inflow of new firms into theindustry. New firms will offer consumers washing powder of new brands,sometimes not much different from those already produced in a new package,another color or designed for washing different types of fabrics.