What products or services does this firm sell? If the firm sells a wide variety

Question

What products or services does this firm sell?

If the firm sells a wide variety of goods, choose a single item to answer the following questions:

c. What other firms compete with this company?

Are there many competitors, only a few, or none for this firm?

Do the competing firms sell exactly the same product or does each company produce goods with special characteristics?

Which of the following market structures can this firm be classified?

(please circle one)

Perfect competition / Monopoly / Monopolistic Competition / Oligopoly

12

g. (5 points + 2 bonus points) Briefly explain the reasons that made you choose this classification for the firm and what could be their pricing strategy?
[Hint: You may also add information that you have learned in the class such as: how this firm choose the quantities?

what price do they charge relative to marginal revenue?
what could happen in the short-run and long-run in this industry? what can government do to reduce dead-weight loss (if any)? Any other information that you have learned...
Use graphs (if needed). 2 bonus points for innovative response!!]

Question 5: Individual Exercise on Market Structure (10 points total+ 2 bonus points) a. Think of a firm [It should be a real company (not hypothetical)): b. What products or services does this firm sell? fthe firm sells a wide variety of goods, choose a single item to answer the following questions: c. What other firms compete with this company? d. Are there many competitors, only a few, or none for this firm? Do the competing firms sell exactly the same product or does each company produce goods with special characteristies? e. f. Which of the following market structures can this firm be classified? please circle one

Explanation / Answer

We can think of BMW a car producing company. The company is into automobile manufacturing mainly cars Other firms that compete are Mercedes, Volkswagen, Toyota and many other. There are few competitors No the firm are differentiated. The products are differentiated on the basis of technology used . The market structure is that of oligopoly where goods are differentiated and number of sellers are not large.

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