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Market Structures

RUNNING HEAD: MARKET STRUCTURES

Market Structures
University of Phoenix

Market Structures
In this paper, we will discuss the four market structures of Monopoly, Oligopoly, Monopolistic Competition and Pure Competition. We have identified four companies that operate in each of these market structures: Salt River Project, The Coca Cola Company, Russ's Market, and Columbia House. In each market structure we will describe the pricing and non-pricing strategies of the companies operating in that market. We will also examine Quasar, a notebook computer company. They entered the market with a new product and we will explain the progress from one market segment to the next as the lifecycle of the product changes and the number of suppliers and consumers also that changed along with it.
Monopoly Market Structure
The concept of monopoly arises when one firm is the sole producer and marketer of a product or service. According to McConnell and Brue (2004) monopolies come in being when a single firm is the sole producer of a product that has no close substitutes. Monopolies are characterized by a single seller, no close substitutes, price maker, blocked entry and non price competition. The market structure that Salt River Project called SRP operates in is monopoly. SRP is the sole generator of electricity in the Phoenix metropolitan area. The SRP website (2007) state that the company established in 1937 generates hydro, thermal and gas operated electricity. The Phoenix area is specifically assigned to SRB by the government and no other company competes with it. The company uses different pricing strategies to deal with its customers. The strategies are penetration pricing which is designed to initially capture a customer by charging low prices, (Koh, 2005). They also use price matching which matches the price charged by other monopolies like APS, geographical pricing which results in charging different prices in different geographical areas and...