MGTA02H3 Chapter Notes - Chapter 4: Break Even, Oligopoly, Market Price
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MGTA02H3 Full Course Notes
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2 things determine the business" ability to set its price: How competition affects price: pricing in a perfectly competitive market. Large number of small sellers, offering more-or-less the same product. Buyer has the right to walk away from any seller and look for a better deal. Firm has a limited ability to dictate the product"s price. Must charge what everyone else is charging. Market price: at any particular time, the prevailing price to which buyers and sellers agree: pricing in an oligopoly market. Small number of competitors watch each other closely. Try to convince potential customers that their product is different or better in some way by branding. Spend money of branding, advertising, and other forms of promotion: pricing in a monopolistically competitive market, pricing in a monopolistically competitive market. Most of the many sellers are small. They don"t have a big share of the market or large number of shops.
