This assignment asks you analyze an industry of your choice and classify its market structure. Consider...

 

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This assignment asks you analyze an industry of your choice and classify its market structure. Consider the following scale of competition that we've examined in class several times. Most Competitive Perfect Competition -Many buyers & sellers -Identical goods -Low barriers to entry Almost everything Monopolistic Competition -Many buyers & sellers -Differentiated goods -Low barriers to entry Least Competitive Airlines, Cell Phone Service Oligopoly -A few sellers -Similar to differentiated goods -High barriers Monopoly -One seller Unique good -High barriers Choose any industry and answer the following four questions to the best of your ability. Whenever possible, provide references/links that reinforce any statements of fact that you make. 1. To the best of your ability, find out how many sellers are there in this market. Calculate or find either a four-firm concentration ratio (4CR) or Herfindahl-Hirschman index (HHI). Where do you think this information alone would place the industry on the scale above? 2. Explain to what degree are the products differentiated? Do they tend to be horizontally differentiated, vertically differentiated or both? Where do you think this information alone would place the industry on the scale above? 3. How difficult do you think it is for new firms to enter into this industry? What are the nature of the barriers that new firms may face (cost prohibitive, regulations, consumer loyalty could be some barriers)? Where do you think this information alone would place the industry on the scale above? 4. Taking all of the information you've found into account, how would you classify this industry on this scale above? Explain your reasoning and address the degree to which you believe firms have pricing power (i.e. the ability to raise prices without losing a meaningful number of sales). Also identify any facts or statistics that you were unable to find, but would have been helpful in your judgement. Additional notes: • • Be clear about the year in which statistics are associated with. It's no problem to report older data, but you may want to write about whether or not you think those statistics have changed. There is no minimum writing requirement for this assignment and you can list fact and statistics. However, you should write you explanations/analysis of your industry in complete sentences. You may limit your scope to a limited geographic area or segment of the market if it makes your analysis more feasible or realistic. • This assignment asks you analyze an industry of your choice and classify its market structure. Consider the following scale of competition that we've examined in class several times. Most Competitive Perfect Competition -Many buyers & sellers -Identical goods -Low barriers to entry Almost everything Monopolistic Competition -Many buyers & sellers -Differentiated goods -Low barriers to entry Least Competitive Airlines, Cell Phone Service Oligopoly -A few sellers -Similar to differentiated goods -High barriers Monopoly -One seller Unique good -High barriers Choose any industry and answer the following four questions to the best of your ability. Whenever possible, provide references/links that reinforce any statements of fact that you make. 1. To the best of your ability, find out how many sellers are there in this market. Calculate or find either a four-firm concentration ratio (4CR) or Herfindahl-Hirschman index (HHI). Where do you think this information alone would place the industry on the scale above? 2. Explain to what degree are the products differentiated? Do they tend to be horizontally differentiated, vertically differentiated or both? Where do you think this information alone would place the industry on the scale above? 3. How difficult do you think it is for new firms to enter into this industry? What are the nature of the barriers that new firms may face (cost prohibitive, regulations, consumer loyalty could be some barriers)? Where do you think this information alone would place the industry on the scale above? 4. Taking all of the information you've found into account, how would you classify this industry on this scale above? Explain your reasoning and address the degree to which you believe firms have pricing power (i.e. the ability to raise prices without losing a meaningful number of sales). Also identify any facts or statistics that you were unable to find, but would have been helpful in your judgement. Additional notes: • • Be clear about the year in which statistics are associated with. It's no problem to report older data, but you may want to write about whether or not you think those statistics have changed. There is no minimum writing requirement for this assignment and you can list fact and statistics. However, you should write you explanations/analysis of your industry in complete sentences. You may limit your scope to a limited geographic area or segment of the market if it makes your analysis more feasible or realistic. •

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I have chosen the ecommerce industry for this analysis According to a report by Statista there were 13 million ecommerce companies in the world in 2020 However the concentration ratio of the top 4 fir... View the full answer