Case study Microeconomics

Case study about market structure!

The observations which I have made about the market structure from different
analysisare

Question #1:-

Naming the market which I have selected?

Ans

:-

I have chosen the market which is beer market having the market structure of
oligopoly and oligopoly is the study of market in which there are small numbers of
dominant seller focusing on product differentiation to compete.

Question#2:-

Discussing how many sellers and buyers are there in market?

Ans:-

According to observation seven sellers are there producing two types of

premiumbeers and bottled beers . The over all market is 60% in Vietnam. The
estimation onbottled beer is making up the 79% Of the market and 21% of premium
market. 30%consumers consume to home and 70% from restaurants or in other
words the larger number of buyers is from restaurants and households consumers.

Question#3:-

How market is isolated?

Ans:-

According to the observation or the information given(the beer market inVietnam)

as holding firms three out there ,two of them holding the beer market which
isreignited in Northern Vietnam having the highest market share in this region. The
other one is based on southern Vietnam.

Question#4:-

The barriers exist or types of barriers exist in market and how strong they are?

Ans:-
the barriers are existing in beer market in Vietnam according to the in formation
given two types of barriers are existing in beer market which are Brand loyalty and
economies of scale .The brand loyalty actually prevents the competition in Vietnam
among the beer market.Markets are not able to bring their products in the market
because the particularly it hascaptured the beer market that the other product
could be sold out. In Vietnam on beer market three producers each having the
sufficient sales to achieve economies of scalebut new firms having small market
share they can not do that might wont survive further.

Question#5:-

The level of knowledge in the market?

Ans:-

The level of knowledge in Vietnam of beer market is quite high becauseinformation

is given covering the 70% consumption in restaurants and 30% in
homeconsumption product differentiate is a hurdle for new competition to enter as
of knowledge availability there is enough knowledge available for beer market in
Vietnam.

Question#6:-

What is the type of produce differentiation in the market?

Ans:-

basically differentiation is the difference between or among the products but

ineconomics or in management its the difference between or focuses on features
about seven major companies are producing beer but the product is differentiated
into twoways.The first one is mainstreamed bottle beers which makes up about 79%
of market and the second one is premium beers which makes up on estimation of
21% of market such asconsumer focus specific brand in Vietnam situation so that is
also product differentiationin the beer market in Vietnam and that is why market are
also focusing in brand differentiation.

Question#7:-

Are there any cost leaders in the market?

Ans:-

According to the information given I dont think so there is any cost leader because
each firm having enough space to control its price over output because product are
differentiated and there is low competence because they are operating on particular
regions and also the brand loyalty is one the main factors which prevent the entry
of new firm to compete with each other and the price s are not the pointing concern
but thebrand which make the profit of the company.

Question#8:-
What is the short run goal of the firm?

Ans:-

Basically In oligopoly market structure the short run goal of a firm is to maximizeits
profit

. In economic term the about short run goal is that where at least one of theinputs
or factor of productions remain or keep constant. Supposing if

we take two factor of production on a particular productive purpose such as labor

and capital but at least we take one of is fixed, mean to say in the short run we will
not adopt all input into production and especially in short run the fixed cost is
constant and will not alter asoutput increases. Secondly the fixed cost in shot run is
greater then zero( fC>0). And firms also try to balance their marginal revenue and
marginal cost.

MR=MC

Question#9:-

What type of profit earn in long run and why?

Ans:-

In oligopoly the long run

, market earns

earn

abnormal profit due to long rangeof economies of scale and barriers which prevent
new firms to enter in market and existing firm enjoy an abnormal profit.

And if there is low level of barriers to entry thannew firms will enter and there will
be somehow a competence in the market such as southern Vietnam is trying to
enter in central and northern Vietnam and in that situationthe profit will be normal
for firms.

Question#10:-

What is the most likely graphical representation of your chosenmarket?

Ans:-

As oligopoly having two ways geographical representation but as we havent gone

through that so location and shape of an oligopoly demand curve depend on howthe
one firm reacts to a price change introduced by other firm.
LAC

Long run LAC curves of oligopoly the shape of curve shows long range of
economies of scales.

Question#11:-

What types of incentives for innovation exists in your chosen market and why?

Ans:-

Yes the oligopoly is the market structure where the innovation takes placebecause
the level of production expends ,the level of advance technology and also promotes
the growth of a states economy that leads the high standard of living.

Thank you