Various economic and business scenarios are assumed in some of the questions below. You are to apply your understanding of market structure and economic concepts to respond to the questions.
Compare the market structures of Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly under the following headings (About 150 words).
i. number of firms in the market
ii. similarity of the products sold
iii. barriers to entry
Coles is an Australian company providing supermarket, retail and consumer services through its chain of outlets operating throughout Australia. Its main competitors are Woolworths and Aldi. There also the many small vegetable and grocery stores but Coles, Woolworths and Aldi are believed to dominate the Australian market. Coles has over 100,000 employees across Australia.
Identify the market structure Coles operates in.
State your reason why.
Coles and its main competitors sell very similar products through their supermarket outlets. These include milk, ice cream, fruits, vegetables, nuts, eggs, frozen meat and a wide range of other products used and consumed by households. Their profit margin on products is very thin as prices are reduced to a minimum.
Discuss how Coles would consider demand for its eggs in terms of elasticity – perfectly elastic; elastic; inelastic or perfectly inelastic? Draw its demand curve to illustrate this. Explain your choice.
The following extract from the New Daily is about Coles. Read it and answer the questions that follow. (https://thenewdaily.com.au/money/finance-news/2018/03/07/coles-down-down-slogan/)