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Four types of markets: Monopoly, Oligopoly, Monopolistic competition and Perfectly Competitive market - Essay Example

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High school
Author : odubuque
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Macro & Microeconomics
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In this case study we see that Quasar Computers face all four types of markets, Monopoly, Oligopoly, Monopolistic competition and Perfectly Competitive market for its product Neutron. Neutron is a computer that enjoys a monopoly market during the first three years due to the patent. …

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Four types of markets: Monopoly, Oligopoly, Monopolistic competition and Perfectly Competitive market

In this case study we see that Quasar Computers face all four types of markets, Monopoly, Oligopoly, Monopolistic competition and Perfectly Competitive market for its product Neutron. Neutron is a computer that enjoys a monopoly market during the first three years due to the patent. In three years time the patent on the “Neutron” expires and another competitor enters the market making the market an Oligopoly. After a few years, since Quaser faces Monopolistic competition, it has to change its pricing and marketing strategies as there are more competitors and less possibilities of controlling the price. When the product enters a perfect competitive market then no firm can control the price or market. During the Monopoly stage pricing strategy is more important. The firm should set the price at the quantity where marginal cost is equal to marginal revenue. During the oligopoly stage the firm should set a competitive price as well as focus on differentiation. In the monopolistic competitive stage the strategy should be mostly on to non-pricing as it will be difficult to control the price at this stage. The firm should focus more on advertising, branding and sale promotions. In the perfect competition market stage it is difficult for firms to control price or market share. The firm should accept the market set price and wait for a competitor to leave the market in order to increase the market share and sales. ...
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