Markets vs. Industries
Market is a geographically defined area where buyers and sellers interact to determine the price of a product or a set of products. Industries are the supply side of the market.
Market is a geographically defined area where buyers and sellers interact to determine the price of a product or a set of products. Industries are the supply side of the market.
Defining the Market
The market parameters must be set before an analysis of the market can take place.
The market parameters must be set before an analysis of the market can take place.
Arbitrage
Buying a product at a low price in one location and selling at a high price in another.
Buying a product at a low price in one location and selling at a high price in another.
Competitive vs. Noncompetitive Markets
In competitive Markets,because of the large number of buyers and sellers, no individual buyer or seller can influence the price. Example: Most agricultural markets.Noncompetitive Markets are the markets where individual producers can influence the price. Example: OPEC
Market Price
– Competitive markets establish one price.
– Noncompetitive markets may set many prices for the same product.
– Competitive markets establish one price.
– Noncompetitive markets may set many prices for the same product.
Market Definition - The Extent of a Market– Market Definition
Which buyers and sellers should be included in a given market?
– Market Extent Defines the boundaries of the market
Which buyers and sellers should be included in a given market?
– Market Extent Defines the boundaries of the market
Geographic Range of products
– Examples
– Geographic boundaries
– Examples
– Geographic boundaries
Gold: Lahore vs. Karachi
Housing: Islamabad vs. Rawalpindi
– Range of Products
– Range of Products
Gasoline: regular, super, & diesel
Cameras: Polaroid, point & shoot, digital
– Markets for Prescription Drugs
– Markets for Prescription Drugs
Well-defined markets - therapeutic drugs
Ambiguous markets – painkillers
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