Market Structures Like Monopoly, Oligopoly And Monopolistic Competition In Australia Essay

Question:

Discuss about the Market Structures Like Monopoly, Oligopoly and Monopolistic Competition in Australia.

Answer:

Introduction:

The Australian market is undergoing a huge change due to mitigating the changing preferences of the customers towards the produced procurement action. In the context of the existing statement, Carson et al. (2014) determined that along with the technical advancement, the preferences of the customers are changing, which widens the scope of competition between the market players. The particular action has also increased the opportunities for the new marketers to penetrate into the market and convince the potential prospects with the individual business concept. Considering the previous concept, Kassimatis (2008) asserted that the changing behavioural actions of the Australian customers had enhanced the business scope for the new types of market participants with creative communication and production policies. The Australian Securities and Investments Commission (ASIC) have expressed its market reliability rules across the regional systems, dark liquidity and high trading frequency. The specific sets of rules are built on the previous announcement, by the Minister for Financial Services and Superannuation (Kassimatis, 2008). The Australian market scenario represents that the markets fight to initiate the advanced oligopoly position within the region. The customers have generated demand for all sorts of products. Thus, the market is entirely comprised of the monopoly, oligopoly and the monopolistic marketers. Therefore, the thesis statement of the essay signifies that the reforming Australian market structure has increased the opportunity for the monopoly, oligopoly and monopolistic competition.

McKenzie and Lee (2007) stated that the monopoly industry could be termed as one supplier of a commodity, which has no substitutes. Therefore, the monopoly marketers hardly experience, an entry barrier. In the framework of the similar statement, Carson et al. (2014) inferred that Some of the barriers in the monopoly market include, resistor over important raw materials, tariff protection, regulated by the importers and temporarily low price range to enforce the competition. In the similar instance, Lele (2007) specified that the organisations involved in the supply water and the gas are the Australian domestic monopolies, which includes the enterprises like Australian post and Sydney water supply. Due to the absence of the other related firms in the monopoly market, the marketer receives the advantage of setting the price ranges of the offered commodity and simultaneously the consumers are left with no other options but to get convinced with the company’s policies.

On the other hand, the oligopoly market is comprised small numbers of firms that dominate the supply to the entire market. According to Pagel and Wey (2012), in Australia, the oligopoly can be identified as the foremost market form. The market size of Australia is relatively small and it is located far from the overseas markets, which demands a wider numbers of producers. The above reasons are the primary causes that turned the Australian market to be explicitly competitive. In the particular market, it is difficult for the new brands with limited market share to penetrate (Kassimatis, 2008). The majority of the marketers experience the complexities of affording the massive expenditure of the market. The new marketers experience the issue due to the presence of the existing firms into the particular market. The businesses that are operating in the market from the previous tenure have already developed a unified set of customers, which entrust a major threat towards the new enterprises.

Considering the opinion of Pagel and Wey (2012), the oligopoly market states that a small number of firms entirely dominates the overall market. In the country of Australia, there are a low number of oligopoly firms in the overall industry as there are entry barriers into the market of Australia. As per the view of Amin (2008), the entry barriers of an oligopolistic market includes the financial resources that are highly required to enter into the Australian market. The regulation to enter into the market is imposed by the Australian government. The oligopolistic market in the country is also combined with the high degree of differentiated products. In the opinion of Pagel and Wey (2012), the competition between the oligopoly, monopoly and the monopolistic market is entirely based on the sales, not for the price. There is another factor of actions that subsequently affects the other firms in the market. Concerning the oligopolistic market, it has been identified that the activities of one firm are directly affecting the other companies belonging from the industry. The entire automobile industry is the example of an oligopoly market. For an example, Amin (208) mentioned that Kelloggs and Holden's car are the right examples of the oligopoly company. The oligopoly is an industry in Australia has a standard price target for achieving the greatest price and output of the industry.

Furthermore, the monopolistic market competition demonstrates a common market structure in which the firms have many competitors by selling marginally different types of products. Many small businesses operating in the Australia are under the norms and regulations of the monopolistic market. According to the opinion of Pawe?‚ M?‚odkowski (2009), the monopolistic competition in Australian market includes the independent and owned operated services such as restaurants, high-street stores, etc. In the context of the restaurant business, each one of the business entity offers different types of products along with the unique element (Sa, 2015). It has been observed that all the business owners are competing for grasping the same customer base. In the Australian market, there is no hard-coded rules and laws for the monopolistic market business unit. Thus, the expansion of the monopolistic market becomes easier in Australia. Supporting this, Pawe?‚ M?‚odkowski (2009) added that the freedom to enter or leave the market had increased the monopolistic competition with the central feature of a diversified product range. Adding to this, Sa (2015) mentioned that the cost of production in the monopolistic market is entirely designed by the entrepreneur as the marketers make the independent decisions. Hence, the firms in the monopolistic market are assumed to be the most profit maximisers in the Australian market.

The current research context has helped to understand that the monopoly firm in the Australia has the marginal revenue and tries to enhance its demand for the products. However, the oligopoly market has sales competition in terms to increase the market share. The marketers in the oligopoly market have to face some entry and exit barriers while operating in the market of Australia. On the other hand, the monopolistic market in Australia is more flexible as the market players from this structure can independently execute the business operation regarding price, products and sales. There are a large number of independent firms from monopolistic market competing in the market of Australia.

References:

Amin, S. (2008) ‘“Market economy” or oligopoly-finance capitalism?’, Monthly Review, 59(11), pp. 51–55.

Carson, E., Redmayne, N.B. and Liao, L. (2014) ‘Audit market structure and competition in Australia’, Australian Accounting Review, 24(4), pp. 298–312.

Kassimatis, K. (2008) ‘Size, book to market and momentum effects in the Australian stock market’, Australian Journal of Management, 33(1), pp. 145–168.

Lele, M.M. (2007) Monopoly rules: How to find, capture and control the world’s most lucrative markets in any business. London: Kogan Page.

McKenzie, R.B. and Lee, D.R. (2007) In defense of monopoly: How market power fosters creative production. Ann Arbor: The University of Michigan Press.

Pagel, B. and Wey, C. (2012) ‘Unionization structures in international oligopoly’, Labour, 27(1), pp. 1–17.

Pawe?‚ M?‚odkowski, P.M. (2009) ‘Monopolistic market position and losses from monetary integration’, Contemporary Economics, 3(4), pp. 122–125.

Sa, N. (2015) ‘Market structure and welfare under monopolistic competition’, Economics Letters, 132(24), pp. 69–72.

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