MICROECONOMICS

Microeconomics

Microeconomics

Introduction

Monopolistic competition is defined as an organization in a market where you can find many companies selling similar goods to the other but not identical with this product differentiation, the sellers have some degree of control over the prices they charge to sell their product. In this competition, there is a significant number of producers operating in the market without a dominant control by any of these in particular. Another remarkable feature of monopolistic competition is the easy entry and exit to the industry by the producers. A large number of producers of particular goods allows companies do not require large amounts of money, a great size to compete, the costs, however, can be increased by the need to seek differentiated from other competitors. As a result, companies can get into some of the excess profits, although not as much as in the case of monopoly of exchange, through the absence of the ability of new entrants to reduce prices through competition. Prices are higher and less production in this state of prices and production under perfect competition.

Selected Firm

Boise Office Solutions (Boise) is a 'one-stop shop' that offers products and services that aim to meet the needs of each client. Demonstrates a large variety of office supplies, technology products and office furniture makes Boise a great competitor in the Australian office supply industry. Boise is one of the many companies that provide office products. Operating in a monopolistic competitive market has many implications for the company. Here we discover ways to Boise differentiate your products and services from their competitors and how to maximize profits in the short and long term.

1. What sort of industrial sector does the firm operate in (competitive, monopolistic, and oligopolistic)?

Boise functions in a market of monopolistic competition that involves many other suppliers of office products that sell similar or close substitutes. Product differentiation is essential in competitive markets are not the prices, especially when competing against large companies like Corporate Express, Office, Vikings and national levels. Companies emphasize product features, service and quality that helps build customer loyalty to your company and brand. Companies try to make it difficult or impractical for competitors to replicate differences (Blaug, 2006). Customers should be able to differentiate the brand across different product characteristics and the main differences between similar products.

Consumers, by nature, are so sensitive to prices by promoting the distinctive characteristics create customer awareness. Price differences are offset by the perceived benefits that the customer will receive. In order to push their customers away from price orientation, Boise's CEO Chris Milliken states "Boise begin to reconsider and modify its products and services, by differentiating their products so that they can offer their customers to get out of a price-only guidance. "(Milliken 2003) While price is an important factor for differentiation, service companies also set aside. Boise is a large enterprise, public access to capital funds. They are able to invest in additional services and the latest products and ...