Option theories to profit optimization ranging from excellent competition to strict monopolies.

Firms and The Market

Most companies happen to be profit oriented. Companies survive and go on profit. Also governmental establishments, NGO's and NPO's are profit focused, what they do with profit is unique though. Declaring this means that companies seek usually to be for a position where profit is usually maximized. To be sure by now this happens when MC=MR but this is certainly an often changing level as supply and require are dynamic, effectively meaning that if firms get it right once they won't be able to just do similar eternally, they still have to adapt to every single market element as a fresh change is known as a new truth all together which should be studied and addressed. Many of these changes happen in what is referred to as the market, where suppliers and consumers meet to reach a good that suits the pursuits of both parties involved.

Market segments have several different structures which require different " attitudes" in the suppliers in order to enter, compete and successfully gain reveal in the market. When ever competing, one can possibly be in a perfect competition, within a monopolistic competition an oligopoly or a monopoly [1]. Each of these structures ensures different situations when it comes to competition from a perfect competition where firms compete every being similar in terms of risks and options, in terms of the homogeneity with the products marketed, ensuring that every single competitor provides the same opportunity to get a share of the market, to the opposite end of the size where we have monopolies whereby one company alone dominates the whole marketplace not allowing any other organization to enter the industry selling the item (or service) at its selling price.

In all of such we are also considering that you will find no " market distortions" as I usually call these people which are very common in producing (or third world) countries in a very blatant way, and less common and many more hidden in designed countries. They are the issues with fraud and corruption which I face a lot in Angola and see that Africa, Asia and South usa is ridden with that, but as well see it in developed countries it happens creating market effects which impact whatever market structure you are in. If you are within a monopolistic competition market and corruption is incredibly high, it may turn out the fact that market structure you happen to be in is merely perceived as monopolistic competition as only the companies who participate in that practice will effectively secure (typically large) organization will be in such reduced numbers that it can be defined as a oligopoly or perhaps a monopoly.

Scams like taxes fraud is also a bias that influences your competition and eventually may specify whether your perceived oligopoly can become a monopoly or maybe a monopolistic competition. For example should you sell PC's and so does a company that competes with you, and eventually a 3rd firm occurs board that may be considerably cheaper, when initially industry was an oligopoly it may remain a great oligopoly since 3 is still a small number of firms selling the product. But consider that the competitor doesn't pay taxes on goods he imports. This would properly allow him to undercut your rates while still making a profit. Absolutely this would drive the others out of business or severely influence its revenue turning industry into a near monopolistic market for example.

Industry Structures

One among extremes is ideal competition. Are these claims scenario, every single company is known as a price taker. No company is usually big enough to really force the industry prices and the market can be highly competitive with all the stakeholders involved, remarkably informed from the situation in any way points, the supplier and consumer part. Most companies would be quite small not making use of economies of scale, traducing in a way in not one of the most efficient and effective version when it comes to provide the consumer " best value for money". Although competition is definitely fierce because each individual organization is...

Recommendations: [1] Sloman J. and Sutcliffe M., Economics for people who do buiness Third Copy, page 212, Table eleven. 1

[2] Transparency Worldwide, 2005 Problem Perceptions Index (CPI), [internet] Accessed on: 13th November 2005, http://www.icgg.org/corruption.cpi_2005.html

[3] Professional Jewler Publication Archive, Sobre Beers Suspends Operations in Angola, [internet] Accessed on: 13th November 2005, http://www.professionaljeweler.com/archives/articles/2001/aug01/0801dn3.html

[4] Angola News On-line, Edition #16 8 06 1998, [internet] Accessed about: 13th Nov 2005, http://www.africa.upenn.edu/Newsletters/angno16.html

[5] Diamonds Industry Gross annual Review, Sobre Beers Signs New Angolan Agreement, [internet] Accessed on: 13th Nov 2005, http://www.pacweb.org/e/images/stories/documents/addendum%20angola%202005-english.pdf

[6] Specialist Jewler Journal Archive, Lev Leviev is Angolan Connection, [internet] Reached on: thirteenth November 2006, http://www.professionaljeweler.com/archives/articles/2002/feb02/0202dn1.html


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