Panashe
more than 2 weeks ago
(a) Describe three assumptions of a monopolistic market structure using an industry of your choice in Zimbabwe referencing using 6th edition apa style?
1 view
1 view
2 answers
Sort By
ChatGPT
more than 2 weeks ago
In a monopolistic market structure, there are three key assumptions that differentiate it from other market structures such as perfect competition or oligopoly. These assumptions include:
1. Product differentiation: In a monopolistic market structure, firms produce goods or services that are perceived as unique or different from those of their competitors. This differentiation can be based on factors such as branding, quality, design, or features. For example, in the telecommunications industry in Zimbabwe, Econet Wireless and NetOne offer different packages and services to attract customers, creating product differentiation.
2. Limited competition: Another assumption of a monopolistic market structure is that there are few competitors in the market, or that each firm has some degree of market power. This allows firms to have some control over pricing and output decisions. In the banking sector in Zimbabwe, for example, there are a few major players such as CBZ Bank, Stanbic Bank, and Ecobank, which have some degree of market power due to limited competition.
3. Non-price competition: In monopolistic markets, firms often engage in non-price competition to attract customers. This can include advertising, branding, customer service, or product innovation. For instance, in the fast-food industry in Zimbabwe, companies like Chicken Inn and Nando's compete not only on price but also on the quality of their food, customer service, and overall dining experience.
Overall, these assumptions of product differentiation, limited competition, and non-price competition characterize a monopolistic market structure and can be observed in various industries in Zimbabwe. (Makoni, 2021).
1. Product differentiation: In a monopolistic market structure, firms produce goods or services that are perceived as unique or different from those of their competitors. This differentiation can be based on factors such as branding, quality, design, or features. For example, in the telecommunications industry in Zimbabwe, Econet Wireless and NetOne offer different packages and services to attract customers, creating product differentiation.
2. Limited competition: Another assumption of a monopolistic market structure is that there are few competitors in the market, or that each firm has some degree of market power. This allows firms to have some control over pricing and output decisions. In the banking sector in Zimbabwe, for example, there are a few major players such as CBZ Bank, Stanbic Bank, and Ecobank, which have some degree of market power due to limited competition.
3. Non-price competition: In monopolistic markets, firms often engage in non-price competition to attract customers. This can include advertising, branding, customer service, or product innovation. For instance, in the fast-food industry in Zimbabwe, companies like Chicken Inn and Nando's compete not only on price but also on the quality of their food, customer service, and overall dining experience.
Overall, these assumptions of product differentiation, limited competition, and non-price competition characterize a monopolistic market structure and can be observed in various industries in Zimbabwe. (Makoni, 2021).
0
Google Gemini AI
more than 2 weeks ago
Assumptions of Monopolistic Market Structure
1. Single Seller:
- Zimbabwe's diamond industry has only one active diamond mine, the Marange diamond fields, operated by the Zimbabwe Consolidated Diamond Company (ZCDC).
2. Unique Product:
- ZCDC produces unique diamonds with distinct characteristics and a global reputation for quality, creating a monopoly in the supply of Zimbabwean diamonds.
3. Barriers to Entry:
- High capital costs and geological constraints limit the entry of new diamond miners into the market. The government also restricts mining licenses, further hindering competition.
References:
Diamond Industry in Zimbabwe. (2021, October 15). Business Guide Zimbabwe. https://www.businessguidezimbabwe.com/diamond-industry-zimbabwe
1. Single Seller:
- Zimbabwe's diamond industry has only one active diamond mine, the Marange diamond fields, operated by the Zimbabwe Consolidated Diamond Company (ZCDC).
2. Unique Product:
- ZCDC produces unique diamonds with distinct characteristics and a global reputation for quality, creating a monopoly in the supply of Zimbabwean diamonds.
3. Barriers to Entry:
- High capital costs and geological constraints limit the entry of new diamond miners into the market. The government also restricts mining licenses, further hindering competition.
References:
Diamond Industry in Zimbabwe. (2021, October 15). Business Guide Zimbabwe. https://www.businessguidezimbabwe.com/diamond-industry-zimbabwe
0
