Market Structure / Supply & Demand Essay

Monopoly one person or company dominates provision of a particular product or service, in the absence of competitors. Consumers do not take in a choice for provision of the product in question. A monopoly can call the shots on their product (price, availability etc.) as there is no alternating(a) on offer to consumers. Monopolists tend to produce a limited compute of product which are consequently sold at a high price (there is no need to fight). (Control of acquire) The British Government seeks to take a hop the behaviour of monopolies, so preventing unfair business behaviours.Oligopoly a small number of dominant firms or individuals compete to provide a product or service. Competition is limited and as a result, very virtually related. Everything a competitor does directly affects your business. E.g. If one company drops its prices all the other businesses in the oligopoly are affected. championship decisions must always consider competitors mildew / reaction. An olig opoly may agree to maintain unnaturally high prices technically illegal but difficult to prove if nothing is in writing.Duopoly taken literally a duopoly means 2 firms control a market. In reality is usually means that 2 firms dominate a market by having the biggest share in it.Examples of duopolistic markets include Coca Cola and Pepsi as dominant suppliers of soft drinks. There are many competitors in the field but Coke and Pepsi have such a huge share of the market that they dont usually see them as competition or influence on their business decisions.Perfect competition theoretical as are all the above definitions. Multiple providers offer a wide choice to a broad spectrum of consumers. Consumers earn from freedom of choice and businesses competing for theircustom through competitive pricing and customer service.Supply and DemandThe notion of supply and demand is at the heart of a market economy. Prices, earnings, and the supply of goods is determined by the demand for it by consumers.Demand In economic footing this is the amount of a product (or service) relishd by consumers.Supply The quantity of a product or service a producer is ordain to gear up available to consumers and the price at which they want to sell that product.Demand Curve a graph showing the correlation (or demand relationship) between the price of a product or service and how many consumers would desire it at different prices (if all other variables are unchanged). It is an attempt to quantify preference. I.e. how much a consumer is willing to pay for something and at what point the cost outweighs the desire. Companies may use this demand relationship as a pricing guide and to determine how much of a product to manufacture, which in turn indicates the level of resources required. The simplest reading which can be drawn is that as prices rise, demand drops and vice versa.As we can see from the written above, at point A the highest price (P1) reflects the lowest quantity dem anded (Q1). Conversely, at point C the number of units in demand (Q3) is much greater when the price (P3) is considerably lower.The downward slope of the curve reflects a negative relationship between price and quantity demanded. I.e. as one factor rises, the other drops and vice-versa.Variables other than price affecting demand.Demography the statistical make up of consumers (age range, income bracket, education, political persuasion etc.) all influence the demand for goods and services.Income a rise in income often correlates with a rise in demand for a good. The exception to this is if a good is considered inferior a rise in income may result in a switch to goods considered to be of higher quality. (e.g. plonk to fine wine)Substitutes Supply CurveThe basic expound from the suppliers point of view is that the higher the price a good can be sold for the more a business will be willing to supply.ReferencesBized.co.uk. 2014. Biz/ed synergistic Supply and Demand 1 Biz/ed. onli ne Available at http//www.bized.co.uk/learn/economics/markets/mechanism/ synergetic/part1.htm Accessed 8 Apr 2014.Heakal, R. 2014. Demand Curve. image online Available at http//i.investopedia.com/inv/tutorials/site/economics/economics3.gif Accessed 8 Apr 2014.Heakal, R. 2014. Supply Curve. image online Available at http//i.investopedia.com/inv/tutorials/site/economics/economics4.gif Accessed 8 Apr 2014. -BBC News. 2014. Economy tracker Inflation. online Available at http//www.bbc.co.uk/news/10612209 Accessed 7 Apr 2014.HM Treasury, HM Revenue & Customs. 2013. Government incentives help 1,100 companies lift off. press release 7 November 2013.Staff, I. 2012. Economies Of Scale Definition Investopedia. online Available at http//www.investopedia.com/terms/e/economiesofscale.asp Accessed 8 Apr 2014.http//www.etoro.com/blog/etoro-voice/19112013/8-things-investors-watching-google/?dl=30001303&utm_medium=Media&utm_source=46599&utm_content=6579&utm_serial=google3.aspx&utm_campaign=google3.a spx&utm_term=http//paid.outbrain.com/network/redir