From the perspective of a manufacturer (producing a product of your choice) operating with the goal...

Question

From the perspective of a manufacturer (producing a product of your choice) operating with the goal of maximizing revenues and profits, outline strategies for succeeding at this goal under each of the four market forms: Perfect Competition, Monopolistic Competition, Oligopoly, and Monopoly. Be sure to be clear on the reasons for differences in strategies. Include also a discussion of: A) Which market form would benefit you the producer the most and B) Which market form would benefit consumers the most.

Your work is to be a Word document, in APA format, and 3-5 pages long (that means pages of content)

David · Accepted Answer

1 
 
Introduction 
Under each form of market structure, a manufacturer needs to implement different strategies 
in order to accomplish the goals of revenue and profit maximization. The differences in each 
of the market structure lies in the market power and using pricing strategies depending on the 
competition level, number of product substitutes available in the market, barriers to entry and 
exit for the firms, and the nature of product and service. 
The product chosen for analysing the strategies under different market forms is cold drink in 
the beverage industry. Since the goal of the firm is to earn maximum profit or minimizing the 
cost of production, therefore as a producer there will be a need to understand the market 
demand and structure before setting up the price and determining the equilibrium level of 
output to be produced.
Perfect Competition 
Perfect competition market structure is characterized by an industry having too many buyers 
as well as too many sellers in the market. Also, the firms are price takers in the industry 
which means that they cannot set the price of the product on its own. Therefore, the firms will 
charge same price as given by the industry equilibrium from all the consumers in the market. 
No discrimination over pricing strategy can be implemented by the beverage producer in the 
perfectly competitive market form. The price charged by the firm is just equal to its marginal 
cost of production because there is free entry and exit of the firms which makes the firm to 
earn only normal profits in the long run. Both producers and consumers in the market have 
perfect information about the market, that is, about the product quality, price and the 
competition. In the long run, the quantity produced will be at the point where the average cost 
of production is at its minimum level. Hence, as a manufacturer of a cold- drink,

From the perspective of a manufacturer (producing a product of your choice) operating with the goal of maximizing revenues and profits, outline strategies for succeeding at this goal under each of the...

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