Can anyone guide me as to how should one determine the market structure for different shops selling the same product such as a T.Vs. They all belong in the same shopping mall and only sell T.Vs. Is it possible for the different stores to have different market structures? If yes then what things should one look into to determine the different market structures?
Economics Market Structure Help! Watch
- Thread Starter
- 13-06-2016 12:17
- 13-06-2016 19:42
Disclaimer-I do wjec economics.
We've been taught that Market structure depends on:
• Number of firms – (Monopoly = 1, competitive = many firms)
• Degree of product differentiation (e.g homogenous)
• Barriers to entry and exit. – Can new firms enter the market?
This question seems very subjective due to the lack of information, there could be large fixed and sunk costs for operating in a shopping centre meaning there are barriers to entry, also there might only be a fixed amount of positions in the shopping centre for shops to set up. The next issue is the differentiation of the goods, they sound homogeneous, but they may have fake differentiation due to branding etc. This would mean the market structure is perfect competition, monopolistic competition or oligopoly. Since he question states there are more than one shop, you can determine it definitely isn't a monopoly.
We don't have to do anything like this for our spec, but I hope this helps.