ECO 550. follow instructions

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timer Asked: Oct 17th, 2018
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Discussion more than 120 words (2 paragraphs),+ 1 reference.

reply of student a discussion 30 words

reply of student b discussion 30 words

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Oligopolies and monopolistic competition | Forms of competition | Microeconomics | Khan Academy Required more than 130 words This week we are looking at industries. For example, automobiles are a product produced collective by firms in the auto industry. The elasticity of a firm's demand curve depends on the type of market in which the firm operates. In the video, Sal at the Khan Academy, provides the keys to identifying the industry type: perfectly competitive; monopolistic competitive; oligopoly; or pure monopoly. First, identify a firm with which you or your organization does business. Use the characteristics provided by Sal and explain if the firm is: perfectly competitive; monopolistic competitive; oligopoly; or pure monopoly. Second, is the firm's demand curve relatively elastic or relatively inelastic? Explain how you arrive at this conclusion. Third, how does elasticity effect the firm's control over its price? PLEASE DO NOT RELY ON WIKIPEDIA, INVESTOPEDIA OR ANY OTHER PEDIA AS A REFERENCE AT ANYTIME IN THIS COURSE. 30 words response required Student A First, identify a firm with which you or your organization does business. Use the characteristics provided by Sal and explain if the firm is: perfectly competitive; monopolistic competitive; oligopoly; or pure monopoly. My focus is on the Supermarkets and Grocery Stores industry which makes up the largest food retail channel in the United States. Establishments in this industry retail general lines of food products, including fresh and prepared meats, poultry and seafood, canned and frozen foods, fresh fruits and vegetables and various dairy products. In my city, we have several grocery stores in the surrounding hometown, but the most convenient ones would be Winn-Dixie and Piggly Wiggly. Winn-Dixie is an American supermarket chain known for its private label Chek brand soft drinks, which are produced in over 20 different flavors plus diet and caffeine-free varieties - one of the widest assortments. They are also known as the "Beef people." Piggly Wiggly Alabama is a cooperatively owned wholesaler serving about 270 independents in a seven-state territory in the Southeast. About 200 of the 270 stores in the co-op carry the Piggly Wiggly banner, which enables them to purchase the Piggly Wiggly private label through the coop. With Winn-Dixie being the biggest grocery store in the city, of course it offers a variety of numerous items, along with a pharmacy; however, they are costly, but offer weekly deals. As Piggly-Wiggly stands as the smaller chain store and with more reasonable prices, it's a very big competitor that also offers weekly deals at a reasonable rate. For example, when shopping for ground beef, Winn-Dixie may offer a better quality/selection, but the cost may be at a rate of $5.00 per pound, as Piggly-Wiggly would offer a good selection at $2.00 per pound. When you have a lot of middle wage citizens living in a small city, the lower price competitors tends to succeed. As weekly sales changed, so does their prices. From increasing to decreasing, the stores were in comparison. Even this day, Winn-Dixie filed bankruptcy in March 2018 and closed their doors while Piggly-Wiggly is still in operation and is also expanding by adding a pharmacy. In turn, Piggly-Wiggly would be considered the perfectly competitive firm. Second, is the firm's demand curve relatively elastic or relatively inelastic? Explain how you arrive at this conclusion. I think that Piggly-Wiggly's demand curve would be relatively inelastic. When a small change in price of a product causes a major change in its demand, it is said to be perfectly elastic demand. In perfectly elastic demand, a small rise in price results in fall in demand to zero, while a small fall in price causes increase in demand to infinity. By this store having cheaper prices, they have more shoppers, which causes the demands to be great, especially for their meats and can goods. Third, how does elasticity effect the firm's control over its price? The key concept in thinking about collecting the most revenue is the price elasticity of demand. Products whose purchase prices represent a significant portion of a consumer's overall budget tend to be price elastic. As such, brand name food products are elastic because savvy consumers know how to compare prices at more than one grocery store. Grocery retailers actively compete against each other to be regarded as the low-price leader in their market. When shopping, we all notice price changes. If management increases the price of a highly elastic product, the quantity purchased may decline so much that total revenues from the product decline, which is not the result he intended. For example, we, the consumers, know to look for our favorite brands of consumer electronics, for example, at more than one retailer, and seek out the lowest price. Therefore, the greater the necessity of the product, the less elastic, or more inelastic, the demand will be, because substitutes are limited. The more luxurious the product is, the more elastic demand will be. As Piggly-Wiggly as less substitutions as Winn-Dixie does, the more inelastic the store becomes.anika 30 words response required Student B First, identify a firm with which you or your organization does business. Use the characteristics provided by Sal and explain if the firm is: perfectly competitive; monopolistic competitive; oligopoly; or pure monopoly. I work for a skincare/beauty industry. The are a lot of skincare companies with differentiated products. For a company to be in a perfectly competitive industry, there must be a bunch of other businesses in the industry. Of course, there are CVS, Walmart branded skincare products. There are also Estee Lauder, Mac, Avon and Clinique just to mention a few. They all promote skincare routines aimed at having good skin, promoting beauty and ensuring that people age later and better. The characteristics provided by Sal would put this in the closest category of perfect competition because of the differentiated products. Also no industry and in this case, the skincare one can be perfectly elastic. Second, is the firm's demand curve relatively elastic or relatively inelastic? Explain how you arrive at this conclusion. Since there are other close substitutes with regards to the products churned out by competitive companies such as Mac, Avon etc., demand for skincare products tend to be elastic. Since there are numerous businesses in the industry, no one firm can affect the industry price because consumers can get it from elsewhere if one business in the industry has extremely high prices. Third, how does elasticity effect the firm's control over its price. In order to generate revenue for the business, heavy sales is relied upon. There is no control in a perfectly competitive market when it comes to pricing so if a company sells above the marginal cost of it's products, it sells more. Below the marginal cost and the business sells less. References Froeb, L. M. (2018).B Managerial Economics, 5th Edition. [Strayer University Bookshelf]. Retrieved fromB https://strayer.vitalsource.com/#/books/9781337468015/ edmu ...
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WardaD
School: UC Berkeley

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The firm that I choose is Samsung in the smartphone industry. The industry deals with
mobile phones, tablets and smartphones. Nowadays, there are more mobile phone stores all over
the world. The smartphone industry is an oligopoly since there are only a few sellers in the
industry (Vives, 2001). The dominant players in this industry are Samsung and Apple. I think
Samsung is less elastic since it is an oligopoly firm. The higher the elasticity the more sensitive
the buyers become sensitive to the changes in prices. People buy the Samsung products to
satisfy their needs. The devic...

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