Differientiating Between Market Structures
Differentiating Between Market Structures
The airline industry is a competitive market in society today. It is a perfect example of an oligopoly market structure because it is highly concentrated. There are many large players within the industry but only a few that determine the market prices like JetBlue. According to "CNN Travel" (2013) "For the ninth consecutive year, JetBlue Airways ranked first for satisfaction among all North American airlines.”
JetBlue is one of the leading organizations in the airline industry. The organization keeps the costs low which has a direct impact on the other organizations. To ensure the demand stays high the …show more content…
Oligopoly Verizon Cellular Service Cell service There are many barriers to enter the market. High start up costs, government regulations, and copyrights or patents. There are a small amount of large firms that make up the market. There is no absolute number. The firms have control over the price but often take to advertising or brand-name promotion. Many times these firms will compete with others by giving away free phones or minimizing the price of plans. Oligopoly are price makers therefore they price elasticity of demand is elastic and effected by the price. The economic profits will be lower in the short-run in order to discourage new entries into the market. There is presence of economic profit in the long-run. There are fluctuations of the prices at times however the barriers make it more difficult to enter and exit the market.
Monopolistic Competition Marlboro Cigarettes These firms have some restriction such as financial barriers that exist for new small businesses therefore economic profits may continue for any existing firms There are large numbers of firms. Product differentiation allows producers to have some control over the prices of their products. The demand curve is