As we move from theory to our real-world market structures, we'll go through an exercise where we analyze a current business and its market structure. Remember that our discussion instructionsare posted in the orientation module under resources.

Please note that as with our previous discussion, we'll use our replies to provide feedback on a classmate's post.

Prompt: Individual Posts

Post a response to the following questions by Tuesday 10/24 at 11:59pm. As with past posts, try to keep your response thorough but concise, so that your group members can easily read and reply to your post.Please note that for this discussion, you WILL be able to see your classmates' posts prior to submitting your response. Once a company/industry is taken by someone else, you must choose a different example.

Return to the business that you analyzed last week (a well-known business that you have interacted with recently). You should have already listed some fixed & variable costs for the business, identified its industry and primary competitors, and evaluated whether there is free entry into the market.

1. Start by restating the business and the market in which this business is operating. You might have to add some specifics about the scope and nature of the market. [For example, if you choose an Indian restaurant, thinking about the market as restaurants in the Bay Area would be very different from the market for Indian food in Pleasant Hill.]
2. Once you have a sense of your market, briefly analyze your firm's industry based on our 4 key characteristics of market structures (we started the first two last week):

Characteristic	Questions to consider
Number of sellers	How many competitors does this firm have? (many? a few? none?)
Barriers to entry	If you wanted to, how difficult would it be to enter this industry and start a competing business? (is there free entry? slight barriers? significant barriers? or is entry completely blocked?) If there are barriers to entry, what types exist?
Product differentiation	How similar are this firm's products to those of its competitors? (are they identical? slightly different? extremely different?) In what ways do sellers differentiate their products? (For example, are we talking about different brands of gas, which are relatively similar, or types of cars, which are widely differentiated?)
Control over price	How much market power does this firm have? To evaluate that, think about how this firm's prices compare with its competitors. Could this firm raise its prices and still sell its goods/services? (does the firm have no control over price? some control? full control?)

3. Based on your answers above, which of our 4 market structures do you believe best fits the industry in which this business is operating? Why? As a reminder, we had the extremes of perfect competition and monopoly (which are rarely seen in the real world), and our more realistic structures of monopolistic competition and oligopoly. Keep the key characteristics in mind as you determine the best fit.