Question
Download Solution PDFCompetitive behaviour and competitive market structure are _______ related.
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFKey Points
- Competitive behaviour and competitive market structure are inversely related.
- As the market structure becomes more competitive, the intensity of competitive behaviour among firms tends to decrease.
- Conversely, in less competitive market structures, firms are likely to exhibit more aggressive competitive behaviours to gain a larger market share.
- This inverse relationship is crucial in understanding market dynamics and the strategic interactions between firms.
Additional Information
- The concept of market structure and competitive behaviour is fundamental in the field of industrial organization.
- Market structures can range from perfect competition to monopoly, with various forms of oligopoly and monopolistic competition in between.
- In a perfectly competitive market, firms are price takers and have minimal competitive behaviour regarding pricing.
- In contrast, in a monopolistic market, the single firm has significant market power and competitive behaviour can involve barriers to entry and other strategic actions.
- Understanding the relationship between market structure and competitive behaviour helps in regulating markets and promoting fair competition.
Last updated on May 28, 2025
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