January 29, 2013
This week’s current event is correlated with market structure, the company chooses to be evaluated is Goodyear Tire.The market structure displays a precise atmosphere of a company, the features that stimulate the company’s output and pricing decisions. Goodyear Tire strives to stay ahead of the competition. The company says its strength is to continue to be innovative and try to be the market leader of tires. Goodyear Tire’s is a company driven by pure competition meaning that the company is motivated to outperform the competition producing a similar product. Goodyear tire continues to structure the company with the changes in the world in many ways the company is working to be more eco-friendly. Goodyear has developed a tire that makes vehicles more fuel efficient the innovation falls in line with more eco conscious consumers pushing the competition to become innovative. Goodyear took the market information from the previous quarters to help project and make changes to allow the company be more efficient and push the competition to take notice. Goodyear was able to make profits improve over the years from continuing to make improvements every quarter to the market structure.
Four theories of market structure: Oligopoly, Pure competition, Monopoly, Monopolistic Competition. The four theories encourage various actions from consumers when the company lowers or raises prices. The monopolistic competition is created with three expectations. 1. Most company’s sell, buy and produce various products different from each other. 2 There are simple admission and departure of goods. 3. A market has numerous buyers and sellers. The monopolistic has few competitors and has products that have no replacements. The monopoly theory of the market structure is surrounded by three norms 1. The company has a product with known other companies having alternatives. 2. There is a sole seller. 3. There is a high obstacle to reach the company...