Essay on International Business Structure - 963 Words

There are four theoretical constructions relating to market structures, these are oligopoly, monopoly, perfect competition and monopolistic competition. Each theory has its individual assumptions and norms. In turn, these theories will be analysed, compared and contrasted with real life examples. The market structure related to each business reflects the profit maximisation and productions of the firms. The demand curve will also vary depending on the market structure; MC=MR. Perfect competition is representative of a competitive market; customary firms sell homogenous products such as milk or potatoes. The generic assumptions for such firms refer to the barriers of entry being unrestricted. The commercial milk market for example, over the†¦show more content†¦Equally in a perfect competition scenario both structures see the consumer with little power over the product or service bought. Figure 1.0 is typical for a monopoly firm that is carrying out profit maximisation. The firm is a price maker unlike in perfect competition; but in contrast to perfect competition a monopolistic will produce a lower output at a higher price in the short term. As like most market structures a monopoly will maximise profits where MC=MR. As shown above, profit is maximised at Q1. The less elastic the demand, the profit will tend to be larger and consequently the MR curve will be steeper. Furthermore, other market structures include oligopoly and monopolistic competition. Oligopoly occurs when a small number of firms have a large market share and consequently the market. The products are relatively differentiated and the main area of competition is product marketing. Oligopolies have various barriers to entry and the interdependent characteristics of an oligopoly, sets this market structure apart from others. Similarly a firm experiencing monopolistic competition will also have numerous firms in the market and consequently each firm will only hold a small market share. Unlike in an oligopoly where the actions of rivals could possibly be detrimental to each firm, the firms within monopolistic competitionShow MoreRelatedStrategy And Structure Of International Business Essay1188 Words   |  5 PagesStrategy and Structure of International Business (Part 2), summary Firms expand on international level to increase their profitability. In order to maximize that profitability they must adapt their strategy to the structure and business environment. During this unity, I lean haw a firm can be organized and how it can choose the appropriate strategy according to its structure and environment. Also, I lean the different possibility of expansion which a firm can take and the advantages and risks ofRead MoreThe International Industrial And Financial Business Structure1449 Words   |  6 Pageseconomic development has become a common public good. 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