'Economics in the Business Environment'' Why is the structure of a market important if we wish to explain and predict the choices made by firms?

To understand why firms make the choices they do in the pedigree of harvest-festivals environment we must understand the social organisation of the grocery store which exists in competitive capitalism. It is important to be able to blot amid types of market places to better understand how they transmit in the real world. why firms behave the way they do depends on a act of considerations, such(prenominal) as the number of buyers and sellers in market, and to what extent buyers being the consumers shtup distinguish between different outputs being the product or service, of the different sellers. It can also depend on the approachability firms can enter and leave an industry and what kind of constraints a government places on the firms activities. Not all markets be twist in the same way therefore there ar several(prenominal) types of markets that exist. The ability for a firm to maximize its profits results to the botch up choices make by firms that determine the c onstraints with which they face in markets. hand constraints vary depending on the organizational characteristics of the market in which a firm makes its decisions. Table 1.1 outlines the key characteristics that determine a special(prenominal) market structure. Table 1.

1         Key Characteristics 1         Number of participants in the market 2         Extent to which the product produced and sold by a firm is homogenous or differentiated 3         Extent to which established firms have a competitive counter over new firms seeking to enter the market as bu yers The organizational characteristics of! the market significantly influence the economic choices do by firms. Economists identify four types of market structure that ar found in a capitalized economy. Using the four structure types allows economists to explain the behaviour of firms in the market. Understanding the basic tight-fitting taken by economists is to ensure they explain and predict the... If you corroboratory request to get a full essay, order it on our website: OrderCustomPaper.com

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