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Competition

Competition describes the interaction between sellers in markets, as each party tries to increase their own profits and market share. Sellers will alter price, distribution, advertising, and product in order to beat out the other sellers and obtain their goals. Competition forces firms to create new products or services, or improve their existing ones.

Competition has been separated into perfect competition and imperfect competition. Perfect competition is when a market does not have a firm that has the power to be a price setter and imperfect competition is where firms are able to gain some market power. 

Economic competition can be defined as one of three types. The first is direct competition, which is when a product has the same function as another, making the two products each other’s competitor. The second is substitute competition, when a product and its substitute are in competition with each other. The third form of competition is budget competition, which is the broadest of the three because a product is in competition with anything a consumer will spend money on. Competition does not always exist between firms because a company can have internal competition between two of its own products.

In a monopoly, competition does not exist, most often because of some sort of government production that inhibits other firms from entering the market.

Competition is an important element in economics because it regulates market activity and also maintains or increases quality and utility of product and services.

Categories within Competition

Monopolies

Postings: 220

A monopoly is when a market is dominated by a single seller (the monopolist).

Oligopoly

Postings: 75

An oligopoly is when a market is dominated by a small number of sellers (oligopolists).

Perfect Competition

Postings: 110

Perfect competition is an economy has no firms that have enough market power to be price setters.

Coca Cola's Market Structure Based on Annual Report to Stockholders

Based on Coca-Cola's annual report to stockholders on its web site: • Does the company have characteristics of a perfect competition, monopoly, or oligopoly? • How does competition in this industry help or hurt consumers? • What does the annual report say about the corporation's view of future business challenges and

Competition using Price and Non-Price Means

Using cable providers, Dish Network and Direct TV, can you please explain/discuss how that market competes for your business through (1) price and (2) non-price means? Thank you!

Tariff details are presented.

"A tariff on imports of a product hurts domestic consumers of this product more than it benefits domestic producers of the product." Do you agree or disagree? Explain why you do/don't.

The Competitive Market

For Profit Labs, Inc. (FPL) is a private laboratory that does only routine blood count. With total assets of $8 million last year, FPL took in $3 million in revenue and had expenses of $2 million. The average firms in other industries make a return of only 10 percent on their assets. The market for lab services is potentially

While there is a degree of differentiation among general merchandise retailers like Target and Kmart, weekly newspaper circulars announcing sales provide evidence that these firms engage in price competition. This suggests that Target and Kmart simultaneously choose to announce one of two prices for a given product: a regular price or a sale price. Suppose that when one firm announces the sale price and the other announces the regular price for a particular product, the firm announcing the sale price attracts 50 million extra customers to earn a profit of $5 billion, compared to the $3 billion earned by the firm announcing the regular price. When both firms announce the sale price, the two firms split the market equally (each getting an extra 25 million customers) to earn profits of $1 billion each. When both firms announce the regular price, each company attracts only its 50 million loyal customers and the firms each earn $3 billion in profits. If you were in charge of pricing at one of these firms, would you have a clear-cut pricing strategy? If so, explain why. If not, explain why not and propose a mechanism that might solve your dilemma. (Hint: Unlike Wal-Mart, neither of these two firms guarantees "Everyday low prices.")

While there is a degree of differentiation among general merchandise retailers like Target and Kmart, weekly newspaper circulars announcing sales provide evidence that these firms engage in price competition. This suggests that Target and Kmart simultaneously choose to announce one of two prices for a given product: a regular pr

Decision Criterion

Although Ken Brown (discussed in problem 3-16) is the principal owner of Brown Oil, his brother Bob is credited with making the company a financial success. Bob is vice president of finance. Bob attributes his success to his pessimistic attitude about business and the oil industry. Given the information in problem 3-16, it is li

Government intervention in the market

8.List five ways you are affected on a daily basis by government intervention in the market. For what reason might government be involved? Is that reason justified?

E-Learning Overview

Select an organization or industry (I HAVE CHOSEN E-LEARNING) and have access to its financial information. Prepare an organization and/or industry overview on your selected organization and/or industry. Be sure to include: a. A history of the organization and/or industry (ABOUT 300 words) b.The amount of competition in t

The type of accounting quantitative data you will need to evaluate this decision.

Problem:You have been asked to apply your decision-making skills and analysis to the merchandising of JMI's travel product stores. Much of the floor display space is taken up by the innovations department whi ...there is moreshow problemYou have been asked to apply your decision-making skills and analysis to the merchandising of

Financial Analysis

The Hart Mountain Company has recently discovered a new type of kitty litter which is extremely absorbent. It is expected that the firm will experience (beginning now) an unusually high growth rate (20 percent) during the period (3 years) it has exclusive rights to the property where the raw material used to make this kitty litt

Explore a hypothetical merger

There are 10 auto firms in this problem each showing their market share percentage (US auto industry).The proposed merger involves Ford 22% and BMW 1%. It is noted that Ford includes Mercury, Lincoln, Volvo, Jaguar and BMW includes Mini Cooper.The pre merger index involves all ten firms and equals 1,758 according to my calculati