'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 score of harvest-festivals environment we must understand the social organisation of the commercialise which exists in competitive capitalism. It is important to be able to distinguish amid types of commercializes to better understand how they transmit in the real world. wherefore firms behave the way they do depends on a bit of considerations, such(prenominal) as the number of buyers and sellers in market, and to what extent buyers being the consumers domiciliate distinguish between different outputs being the product or service, of the different sellers. It can also depend on the handiness firms can enter and leave an industry and what kind of constraints a government places on the firms activities. Not all markets be bodily structure 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 malt whisky choices make by firms that determine the constraints with which they face in markets. slyness 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 takings over new firms seek ing to enter the market as buyers The orga! nizational characteristics of the market significantly influence the economic choices do by firms. Economists identify four types of market structure that argon found in a capitalized economy. Using the four structure types allows economists to explain the behaviour of firms in the market. Understanding the basic adept taken by economists is to ensure they explain and predict the... If you verificatory request to get a full essay, order it on our website: OrderCustomPaper.com

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