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Forms of Industrial Organization, Market Structure, and Pricing
Karl
University
MBA 501
Abstract
The team will identify the four market structures, Pure Monopoly, Oligopoly, Monopolist Competition and Pure Competition in the forms of industrial organization.
Pure Monopoly is one firm or company that controls the whole market whether there may not or may be substitutes. Oligopoly is a market dominated by a few large producers of a "homogeneous" or differentiated product. Monopolistic Competition consists of large number of sellers, with differentiated products making it easy to enter to and exit from the industry. Pure Competition is an economic model that describes a hypothetical market form in which no producer or consumer has the market power to influence prices. According to the standard economical definition of efficiency, Pareto Efficiency perfect competition would lead to a completely efficient outcome. This analysis of a perfect competitive market provides the foundation to the theory of supply and demand. Four companies will be discussed in which there are perfect examples of each type of market structure. Discussion about these companies will include the type of market structures and their pricing and non-pricing strategies.
Pure Monopoly
Carnegie Steel Company is an example of Pure Monopoly where a group, a company or a firm can partially plan and control the market through strategic product updated or lower prices. Potential competition can be thwarted while demand for the dominant company's output can be preferentially developed. A good example of this type of market structure would be oil companies. Andrew Carnegie constructed a profitable steel mi ...