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Let us consider the market for burger. V. (2P) Identify the market structure for your product,...

Let us consider the market for burger.

V. (2P) Identify the market structure for your product, and describe 2 strategies that producers in this market could adopt to compete more effectively or to increase their market power.

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Answer #1

Th burger joint is a monopolistic market condition, here, there are many firms in the market that are selling the similar products or the goods that are close substitute to each other. There is free entry and exit in the market and the profit will be zero in the long run.

Two strategy they can adopt to make it more profitable are:

  • advertise and make the product look different in the mind of the consumers, IF the goods are different then in that case the demand will be more inelastic and they can increase the price making more profit.
  • bundle the good with other. for example bundle the Burger with soda or juice that will increase the sale and revenue of the firm.
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