Forms of Industrial Organziation - 1432 Words

Forms of Industrial Organization Economists group industries into four distinct market structures: monopoly, oligopoly, monopolistic competition, and competitive market. These four market models differ in several respects: the number of firms in the industry, whether those firms produce a standardized product or try to differentiate their products from those of other firms, and how easy or how difficult it is for firms to enter the industry (McConnell Brue, 2004). This paper further defines each market structure and provides an example of a company representing each market structure. Monopoly A monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to†¦show more content†¦Either entry to or exit from monopolistically competitive industries is quite easy† (McConnell Brue, 2004, p. 413). Nike running shoes are an example of monopolistic competition where Nike states that their Dynamic Ride adapts to every stride for customized support and excellent cushioning of a runner’s foot (Nike, Inc., 2010). Nike is clearly distinguishing its running shoe designs from those of competitors. According to the Campaign for Labor Rights, the cost to manufacture a pair of Nike shoes is about $3.50 while retailing for over $100 (Glenn, 2004). Nike’s competitors such as Adidas, Mizuno, and Saucony also retail many running shoe models for over $100. Nike employs competition-based pricing as their shoes are priced within 10% of competitor’s. Competitive Market A competitive market is essential to preserve constancy and profit in business where there are like businesses. By having a competitive market it permits businesses to modify items and prices dependent on the needs of the consumers, competition and profit and sales of a business. Examples of competitive businesses are the fuel, vehicle, food chains, technology and office supply chains and cable. Walmart is an example of a competitive market because of the huge number ofShow MoreRelatedThe Social Justice Issue Of Globalization839 Words   |  4 Pagesroles of globalization. This has in turn created a more competitive economic climate. Extensive form of globalisation comes from export trade, which results from advantage based on natural resources and low-wage labor. This control and injustice of poverty should not be accepted. As we enter the Digital age, some two billion people still do not have access to electricity, the basic technology of the industrial age. This inequality of electricity, a basic need for some, not even a choice for those inRead MoreManagement History2328 Words   |  10 PagesManagement History Modern managers use many of the practices, principles, and techniques developed from earlier concepts and experiences. The Industrial Revolution brought about the emergence of large-scale business and its need for professional managers. Early military and church organizations provided the leadership models. In 1975, Raymond E. Miles wrote Theories of Management: Implications for Organizational Behavior and Development published by McGraw Hill Text. In it, he popularized a