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Case Study Project
Total Marks: 100
Elective- Marketing Management
Question: How probable consequences of a protracted
price war care be avoided? Give examples of two industries making bath soaps.
What consequences you foresee if such price wars are not avoided on time?
Answer
: Pricing under monopolistic and oligopolistic competition
Introduction
Pricing decisions tend to be the most important decisions made by any firm in any kind of market structure. The concept of pricing has already been discussed in unit . The price is affected by the competitive structure of a market because the firm is an integral part of the market in which it operates.
We have examined the two extreme markets viz. monopoly and perfect competition in the previous unit. In this unit the focus is on monopolistic competition and oligopoly, which lie in between the two extremes and are therefore more applicable to real world situations.
Monopolistic competition normally exists when the market has many sellers selling differentiated products, for example, retail trade, whereas oligopoly is said to be a stable form of a market where a few sellers operate in the market and each firm has a certain amount of share of the market and the firms recognize their dependence on each other. The features of monopolistic and oligopoly arediscussed in detail in this unit.
Pricing decisions tend to be the most important decisions made by any firm in any kind of market structure. The concept of pricing has already been discussed in unit . The price is affected by the competitive structure of a market because the firm is an integral part of the market in which it operates.
We have examined the two extreme markets viz. monopoly and perfect competition in the previous unit. In this unit the focus is on monopolistic competition and oligopoly, which lie in between the two extremes and are therefore more applicable to real world situations.
Monopolistic competition normally exists when the market has many sellers selling differentiated products, for example, retail trade, whereas oligopoly is said to be a stable form of a market where a few sellers operate in the market and each firm has a certain amount of share of the market and the firms recognize their dependence on each other. The features of monopolistic and oligopoly arediscussed in detail in this unit.
MONOPOLISTIC COMPETITION
Edward Chamberlin, who developed the model of monopolistic competition, observed that in a market with large number of sellers, the products of individual firms are not at all homogeneous, for example, soaps used for personal wash. Each brand has a specific characteristic, be it packaging, fragrance, look etc.,though the composition remains the same. This is the reason that each brand is sold Pricing Decisions individually in the
Edward Chamberlin, who developed the model of monopolistic competition, observed that in a market with large number of sellers, the products of individual firms are not at all homogeneous, for example, soaps used for personal wash. Each brand has a specific characteristic, be it packaging, fragrance, look etc.,though the composition remains the same. This is the reason that each brand is sold Pricing Decisions individually in the
Dear students get fully solved assignments
Send your semester & Specialization name to our
mail id :
“ help.mbaassignments@gmail.com ”
or
Call us at : 08263069601
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