Market structure
- Created by: Temi Animashaun
- Created on: 24-11-18 09:41
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- market structures
- barriers of entry/exit
- Branding and adverising- competing with firms that are already established. (artificial)
- sunk costs- costs that are non refundable. once you are done with machinery specific to your firm it is no longer useful to anyone and cannot be sold. (natural barrier)
- legal barriers- licences e.g bus market in the 1980's buss's had special licences to go on certain roads. (natural barrier)
- anti competitive pricing- established firms set deals that new firms cannot compete with, e.g, 2 for 1 (artificial barrier)
- High capital costs (natural barriers)
- re-sale of assets- the price of stocks may fall resulting in a massive loss.(barrier of exit)
- redundancy costs- staff you need to pay of
- Economies of scale- other firms cant compete with producing at low prices (natural barrier)
- cost of ending licence approvals- e.g, paying of rents .
- limiting pricing and predatory pricing
- limit pricing-prices are set low enough to make it unprofitable for other firms to enter the market.
- predatory pricing- prices set below average costs with the aim of forcing rival firms out of business
- product differentiation
- pruduct differation
- the marketing of generally similar products with minor variations ,
- barriers of entry/exit
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