MASTER OF BUSINESS ADMINISTRATION
C/O MOSES KOTANE INSTITUTE
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TABLE OF CONTENTS
Overview of perfect and imperfect market structures
Nature of the markets
Price fixing, collusions and cartel behaviour patterns
Oligopolistic industry and price formation
The Global Economic Crisis
“When America sneezes, the rest of the world catches cold”
Global Economic Crisis
“The Great Depression”
Causes of “The Great Depression”
End of “The Great Depression”
Historical Importance of “The Great Depression”
Factors that led to the “Global Economic Crisis”
Indicators and/or consequences of the economic crisis
Economic lessons that have to be learnt
List of References
Question 1.1 Overview of perfect and imperfect market structures 1.1.1 Nature of the Markets
Market may be defined as the organized exchange of commodities (goods, services, or resources) between buyers and sellers within a specific geographic area and during a given period of time. In essence, a buyer gives up money and gets a good, while a seller gives up a good and gets money. From a marketing context, in order to be a market the following conditions must exist: * The target consumers must have the ability to purchase the goods or services. * They must have a need or desire to purchase.
* The target group must be willing to exchange something of value for the product. * Finally, they must have the authority to make the purchase. If all these variables are present, a market exits.
A market structure may be defined as the manner in which markets or industries are organized, based largely on the number of participants (buyers and sellers) in the market or industry and the extent of market control of each participant. The structure of a market primarily depends on the number of firms operating in the market. Standard market structures
Economics identifies the following standard market structures based on their nature: * Perfect competition
* Imperfect competition, which is further divided mainly into: *
Question 1.1 Overview of perfect and imperfect market structures
Market Structure Continuum
The exhibit to the right illustrates how these four market structures form a continuum based on the relative degree of market control and the number of competitors in the market.
Question 1.1 Overview of perfect and imperfect market structures 1.1.2 Perfect competition
Perfect competition occurs when none of the individual market participants can influence the price of the product. (They are price takers). The price is determined by the interaction of demand and supply and all the participants have to accept that price.
The demand curve for the product in the market
Perfect competition is an ideal market structure characterized by:
* A large number...
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