Question

• Pick a firm from which you purchase goods or services or by which you are employed. Identify the firm’s relevant market structure. Strongly support your answer with theory from class. Be as detailed as possible and expand upon each concept. For example, if the firm is monopolistically competitive, how exactly do they differentiate their product? Or if it’s in an oligopoly, how does the firm react to its competitors’ actions? These are two limited examples. While you may not address these specific questions, they demonstrate how to contribute to a well-developed post.

Answer 1

I purchase bread and eggs each day for the breakfast. The bread in my place is supplied by a few brands such as bratania, orowheat, English oven among a few others. This is a oligolopy market. The difference in the prices of the brand is very less because the homogeneous good. These bread producers decide on the price of the bread of their brand after taking into account the reaction possibilities of the other firms. If these firms charge too high a price the cstomers will shift demand to a low charging price and the high charging firm will loose all its market share. Given that the cost structure of these producers is the same, the rival firms will not folloe the suit and the firm may loose its market share.