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Documente Cultură
Structures
ECO/365
OCTOBER 19, 2015
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Market Structure
The market structure can be defined by the
number of firms; negotiation strengths in terms
of ability to set price; the amount of
concentration among them; the amount of
differentiation and individual products; and the
ease or difficulty of entering and exiting the
market.
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Oligopoly Characteristics
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Jacobs Engineering
Group
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Strategic Decision
Making
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Competitive Strategies
In oligopoly, a price
competition can turn into a
price conflict reducing
profits. If one firm decides
to increase its price, the
other firms may not follow
and in turn the other firms
will gain the customers. The
firm that raised prices will
see a drop in quantity
demanded, i.e. the demand
is more elastic when the
firm decides to increase
prices.
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Competitive Strategies
If a firms in an oligopoly
market structure decided to
drop their prices, the other
firms know that they will
lose a lot of market shares if
they dont drop their prices,
so they drop their prices as
well. Because most
customers are comfortable
where they are, the
company that dropped the
prices in the first place will
see very little increase in
demand so the demand is
inelastic.
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Recommendations
Engineering Group
should make the decision
to work together with other
firms and make their
services inelastic. By
adding a larger variety of
services and making it
unique, Jacobs Engineering
Group will proceed in
making profits.
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Jacobs
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Recommendations
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0
Conclusion
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