Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
RUNNING HEAD: Pricing Strategy & Market Structure 1
Devan Hindman
American Military University
ECON600: Managerial Economics
31 March 2017
Pricing Strategy & Market Structure
2
Abstract
Different market structures create several variations of how companies compete for
specific goods or services. This means each different type of market structure can be
determined by the nature of each specific product within them, the nature of the buyers
within the market, as well as the nature of the sellers in that market. The different types
of market structures that will be discussed throughout this paper include perfect
competition, monopolistic competition, oligopoly, and monopoly. Each of these types of
market structures will have definitively different characteristics and pricing strategies
among them.
Pricing Strategy & Market Structure
3
Pricing Strategy & Market Structure
The first type of market structure that will be described is known as the perfect
competition market structure. If you were to look at a perfect competition market
structure you would see that there are several different sellers within the market
attempting to sell very similar products or commodities. Due to the fact that there are so
many different sellers within the market selling the same type of product, there is easy
entry into and exit out of this type of market. Also, it is important to understand that in a
perfect competition market, the individual firms have absolutely no influence on the
price within the market (Armstrong, Block, & Fraser Institute, 2012).
The easiest way to know if it is perfect competition market structure is by
determining if there are a high amount of firms with the same type of product and allow
