Different Types Of Market Structures Essay

Different Types Of Market Structures Essay

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Companies across the world conduct business within certain market structures. These market structures have been established based on factors such as, the number of sellers within the market, the barriers that exist within the market that create difficulty for new companies to come into the market, the types of products that are being sold, the nature of the competing companies, and the pricing power that the companies within the market have. This paper will examine the different types of market structures organizations operate in and evaluate the differences between market structures. It will also take a closer look at the lodging industry and one of its biggest players, Marriott International, at the market structure in which this corporate giant is operating in.
There are four basic market structures: perfect competition, monopoly, monopolistic competition and oligopoly (Sheeba, 2012). First, let’s look at the two extreme ends of the spectrum. A perfect competition market exists, when there are several firms that are present in a market who all produce identical products and are all sold at market price. None of the producers in the market can control the price and the demand curve is perfectly elastic. The entry barriers to this market are low and the only factor determining sales is price. On the other end of the spectrum is the monopoly market structure. In such a market there is usually just one seller. The entry barrier is very high to this kind of market. The cost of investment, copyright or holds over resources are some examples of high entry barrier (Sheeba, 2012). An example of a company operating a monopoly would be a local water utility company. These companies are referred to as a natural monopoly, due to the fact t...


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...ract more customers who are looking for the high standards of quality that Marriott offers. The continued focus on the customer will also help them to retain customer loyalty, adding barriers to companies attempting to enter the market while stunting the growth of competitors.



Resources
Sheeba (2012). Types of Market Structures. Retrieved from http://financetrain.com/types-of-
Market-structures/HTrends. (2008).The Lodging Industry Market Structure - by Manmohan Shetty. Retrieved from http://www.hotelnewsresource.com/article32324.html
Marriott International. (2015). Marriott. Retrieved from http://www.marriott.com/careers/business-facts.mi
Colander, D. C. (2013). Microeconomics (9th Ed.). Retrieved from the University of Phoenix
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