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Chapter

MGTA02H3 Chapter Notes -Monopolistic Competition, Starbucks, Liquor Control Board Of Ontario


Department
Management (MGT)
Course Code
MGTA02H3
Professor
bouvaird

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Management Lecture 03-
*Quiz Next Week (CH 1 & 2)
** - On Quiz
**Degrees of Competition
Not all markets are the same:
o Ability of buyers to negotiate “good” prices, depends on number of
sellers in the market
o Some markets have lots of sellers
o Some markets have few sellers
o Some markets have only one seller
1. Perfect Competition:
Lots of suppliers
All are small (No control over price of milk; Sell very small percentage of
all sales of milk in Toronto)
More or less the same
Must sell at the same price
Ex: Carton of Milk; Chocolate bars
2. Monopolistic Competition
Lots and lots of suppliers
Most are small
Most more or less the same
Some are big, can differentiate themselves; Most sell at the same price
Big suppliers can charge extra (Ex: Starbucks; Apple; UofT)
Ex: Coffee Shops vs. Starbucks ; iphone vs. knockoffs; Universities
3. Oligopoly
Small number of suppliers (4 or 5)
All are “large”
Each tries to differentiate itself
Industry hard to enter, hard to exit
They watch each other closely
Ex: Canadian banking industry; Cell phones; Airlines ; Beer
4. Monopoly
Only one supplier
100% Market Share
Can set whatever price it likes
Ex: LCBO
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