Importance Of Economic Market Structure - 3664 Words

Importance of Economic Market Structures Kevin Green Economics 204 Principles of Microeconomics Charles Fanning 8-3-14 Importance of Economic Market Structure In today’s economy, before an investor or any organization makes a strategic decision to begin production of a product, a market analysis is done to get vital information and to thoroughly understand the domestic or international demand, current suppliers, entry and exit barriers into a market, and the cost of producing a product or service. From gathering this information a firm can identify the market structure the product will enter, find out potential long-run profitability, survivability, incentives and cost efficiency. In this paper I will describe the characteristics of these four market structures: perfect competition, monopolistic competition, oligopoly, monopoly while providing an illustrative example of a couple. Also within this paper will describe the pressures with high entry barriers, preferred selling and buying markets, projected reaction to price changes for elastic and inelastic goods, government intervention and the e xpected effect of international trade on economic markets. The knowledge of knowing how a product or production firm fits into a particular economic market structure is important to investors because it influences a firm’s opportunities and business strategies for a successful venture. When an economic analyst is done correctly and successfully, it can identify theShow MoreRelatedImportance Of Economic Market Structures1406 Words   |  6 PagesImportance of Economic Market Structures Before an organization or investor makes a strategic decision to enter a product in today’s economy, a thorough market analysis is vital to fully comprehend the domestic and international demand, current suppliers, entry and exit barriers present, and cost of production for the product or service being provided. The culmination of this investigation identifies the market structure the product resides in, associated potential long-run profitability, costRead MoreImportance Of Economic Market Structure3611 Words   |  15 PagesImportance of Economic Market Structure In today’s economy, before an investor or any organization makes a strategic decision to begin production of a product, a market analysis is done to get vital information and to thoroughly understand the domestic or international demand, current suppliers, entry and exit barriers into a market, and the cost of producing a product or service. From gathering this information a firm can identify the market structure the product will enter, find out potentialRead MoreThe Impact Of Economic Condition Of A Business Organization1433 Words   |  6 Pagesby the formation of economy. Economics is the fact that can establish or demolish a business. Changes of economic condition of a business organization are the main following factor. 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