Assignment: Analysis of Market Structures & Relating Pricing Strategies
Pricing strategy varies significantly across different market structures. The pricing guidelines in a monopoly market are relatively straightforward. Since the company is the only producer offering the product, it can mark-up the price as far as the customer can bear. The pricing strategies for a producer operating in a perfect competition structure are also fairly intuitive. They are price takers, and hence price is set at the marginal cost of the product. This is due to the fact that there are many firms offering nearly identical products. However, there is optimal pricing for the market structures offering differentiated products with many competitors (oligopoly) or a few producers (monopolistic competition). These are much more complex and involved. It has been stated that differentiation in products that creates differences in customer valuation is the most prevalent type of competition. In such markets pricing strategies may include the three C's of cost, competition, and customer.
Develop a paper detailing an analysis of market structures and relating pricing strategies that are suitable for each of these structures. Furthermore, include a real world example of pricing strategy for a specific company by identifying its market structure.
Your paper should be around 10 pages structured as follows:
Cover page with a running head
Abstract
I. Perfect Competition
i. Description
ii. Pricing Strategies
II. Monopolistic competition
i. Description
ii. Pricing Strategies
III. Oligopoly
i. Description
ii. Pricing Strategies
IV. Monopoly
i. Description
ii. Pricing Strategies
V. Case Study
VI. Conclusion
Format your assignment according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.