Differientiating Between Market Structures Essay - 1008 Words

Differentiating Between Market Structures Name ECO/365 Date Instructor Differentiating Between Market Structures The airline industry is a competitive market in society today. It is a perfect example of an oligopoly market structure because it is highly concentrated. There are many large players within the industry but only a few that determine the market prices like JetBlue. According to CNN Travel (2013) For the ninth consecutive year, JetBlue Airways ranked first for satisfaction among all North American airlines.† JetBlue is one of the leading organizations in the airline industry. The organization keeps the costs low which has a direct impact on the other organizations. To ensure the demand stays high the†¦show more content†¦Or, when it is around the time of the year when the organizations know consumers will be traveling and he or she will be willing to pay the higher prices. The demand seems to rise during these times but the supply does not change therefore allowing the prices to increase and increase until consumers are no longer willing to pay for it. JetBlue is only one organization out of many that have a direct impact on the prices of airlines travel. The organization is number one because it has made changes to not only the prices but the overall experience to better accommodate the travelers. When an organization has competition like American Airlines or United Airlines it must find ways for it to stand out above the rest. Many consumers think having a cheaper flight makes it the best flight but that is not always the case. Regardless, the oligopoly in the airline industry is fierce and here to stay for a while. Example firm Goods or services produced by the organization Barriers to entry Numbers of firms Firm’s control over price Price elasticity of demand Presence of economic profits in short-run Presence of economic profits in long-run Perfect Competition Natural Gas Marketer Natural Gas There are no barriers to enter the market Many The price is determined by supply and demand. The firm only has control on mark ups Market supply and demand determine the price therefore the price is elastic because the supply