GMS 803 Lecture Notes - Lecture 10: Cash Flow, Airline Seat, Market Saturation

• School: Ryerson University
• Department: Global Management Studies
• Course: GMS 803
• Professor: Hossein Zolfagharinia

Document Summary

All sellers and buyers are of such a small size that no one can inluence prices or supply. There are no barriers to entry: monopolistic market/ other extreme of pure competition. Monopolistic market: with only one seller of a product or service. The single seller is able to set the price for the service ofered and should adjust the price to its advantage, given the demand curve. To remain in this situation, the single seller must be able to restrict entry: oligopolistic market. Oligopoly: competition between a few large sellers of a relatively homogeneous (substitutable) product. Each seller must take into account competitors" moves in making pricing decisions. In other words, oligopoly is characterized by mutual interdependence among the various sellers. The individual seller is aware that in changing price, output, sales promotion activities, or the quality of the product, the competitors" moves must be taken into account: monopolistic competition. Monopolistic competition: many small sellers & some diferentiation of products.