BMK 201 Chapter Notes - Chapter 1: Perfect Competition, Market Power, Oligopoly
6 Jan 2021
School
Department
Course
Professor
Document Summary
Competition in the food industry takes several forms; Firm competition between sellers of similar products. Brand competition between brands of the same product type. Institutional competition between different market institutions (e. g. supermarket vs. fast-food restaurant) Functional competition between firms performing same type of marketing function. The level of competition and the behaviour of a firm is influenced by the environment and the structure of the industry in which it operates. Industry structure may be the product of interacting legal, political, social or economic institutions. No barriers to entry/exit, with large number of firms. Farmers are often considered to operate under perfect competition, because there are many farmers producing largely homogenous commodities and individually they have little influence on prices. Consequences for farmer in nearly perfect competition. Farmers are price-takers in bulk commodity markets. Only way to increase profit is to lower costs and improve operational efficiency.
