BUS600 Economics

BUS 600 Economics

Economics is the "study of how societies use scarce resources to produce valuable commodities and distribute them among different people." -- Paul A. Samuelson, Economics (New York: McGraw-Hill, 1948)

There are seven different types of market structure: pure competition, pure monopoly, monopsony, monopolistic competition, oligopoly, oligopsony, price discrimination.

*Pure competitor: The market consist of buyers and sellers trading in a uniform commodity such as wheat, copper, or financial securities. No single buyer or seller has much effect on the going market price.

*Pure monopoly: An industry in economics that produce a product that there are no close substitutes and where significant barriers to entry prevent other firm fro entering the industry to compete for profit.

*Monopsony: There is only one buyer in the market.

*Monopolistic competition: The market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

*Oligopoly: The market consists of few sellers who are highly sensitive to each other’s pricing and marketing strategies in economics. Each seller is alert to competitor’s strategies and move.

*Oligopsony: It is a market where there is a small number of buyers for a product or a service.
*Price discrimination: If one product or service has different price for different buyers which is provided by the same provider, then we call that price discrimination market strategy. An example for the car insurance which offers different price for different category of drivers.