Explain how market structures determine the pricing and output decision of Tesco united kingdom?
In business organizations use the following structures to determine the pricing and output decisions for different business, according to the nature of their products and services.
Perfect competition
When many firms in the business products same kind of products and services its mean the perfect completion market structure works. Where everyone can enter into the market and start business.i.e. Food and beverages, restaurants and pubs, retail stores, etc., are the example of perfect completion where almost same products and services provided by different companies with an almost similar kind of prices. Tesco also comes in this category because there are many food stores almost provide the same products with small price differences capital investment.
Monopolistic Competition
It is a structure which is almost similar with perfect competition. There is little different from the competition structure where all firms produce differentiated products. so they have some control over its price. Where they can change prices of some items.However, rest of products have the same prices.
Monopoly market structure
A structure where one firm in the industry, which producing unique products.i.e. Medicines, water, gas or Apple companies.This is a unique structure where there is no competitor in the market. The company is can be the leader in the market with its own selected price. In this market structure firm can generate maximum profit. However, In this system firm do not worry about customer’s price choice and customers have to pay for the products.Tesco can use this market structure if they have a special product which no other company is producing into the market otherwise this structure is not suitable for Tesco.
Oligopoly market structure
A market structure where there are few companies producing the same kind of products. We can say that the nature of the products is undifferentiated or differentiated and main examples of these products are cement, cars and mechanical products. In this structure, there are fewer competitors and company select their own prices and also consider customers’ demands. Customers can demand about their own choice of products by paying the price according to the company demands. Special dress or usage products for customers.
In business organizations use the following structures to determine the pricing and output decisions for different business, according to the nature of their products and services.
Perfect competition
When many firms in the business products same kind of products and services its mean the perfect completion market structure works. Where everyone can enter into the market and start business.i.e. Food and beverages, restaurants and pubs, retail stores, etc., are the example of perfect completion where almost same products and services provided by different companies with an almost similar kind of prices. Tesco also comes in this category because there are many food stores almost provide the same products with small price differences capital investment.
Monopolistic Competition
It is a structure which is almost similar with perfect competition. There is little different from the competition structure where all firms produce differentiated products. so they have some control over its price. Where they can change prices of some items.However, rest of products have the same prices.
Monopoly market structure
A structure where one firm in the industry, which producing unique products.i.e. Medicines, water, gas or Apple companies.This is a unique structure where there is no competitor in the market. The company is can be the leader in the market with its own selected price. In this market structure firm can generate maximum profit. However, In this system firm do not worry about customer’s price choice and customers have to pay for the products.Tesco can use this market structure if they have a special product which no other company is producing into the market otherwise this structure is not suitable for Tesco.
Oligopoly market structure
A market structure where there are few companies producing the same kind of products. We can say that the nature of the products is undifferentiated or differentiated and main examples of these products are cement, cars and mechanical products. In this structure, there are fewer competitors and company select their own prices and also consider customers’ demands. Customers can demand about their own choice of products by paying the price according to the company demands. Special dress or usage products for customers.
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