Copyright 2002, Professor Jerome M. Katrichis




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C. 1. A. Competitive Structure.

This section describes the general competitive structure that exists in the industry. Ranging from structures with the most to the fewest competitors, competitive structure can be classified as purely competitive, monopolistic competition, oligopoly or monopoly.

In a purely competitive industry there are, for all practical purposes, an infinite number of competitors. The name of the category is a little misleading in that competitors don't really compete with each other. They compete only to increase output. In general organizations in this kind of industry are thought of as "price takers," in that they can only receive whatever the prevailing market price is for their product, and have very little influence on what market price is. Most farmers find themselves in this type of competitive environment.

Monopolistic competition is a situation where there are many competitors with easily substitutable but slightly differentiated offerings. In the U.S. most retailers find themselves in this type of environment.

Because most products are mature, most producers of products find themselves in oligopolistic environments. An oligopoly is characterized by an environment where the industry in dominated by a few large producers although there can be a large number of other players, these few large producers tend to account for the bulk of the market and industry.

A monopoly is characterized by a market with a single provider. Typically there is a somewhat inelastic demand curve and some type of government intervention.





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