CHUA 5 - 6

• Market Structure

  •Is the nature and degree of competition among firms operating in the same industry

  •Markets are classified according to certain structural characteristics
• Profit Maximization

  •Ultimate goal of producers
• Utility Maximization

  Ultimate goal of consumers
• Four Categories of a Market Structure:

  •Perfect Competition

  •oligopoly

  •Monopolistic competition

  •pure monopoly
• Perfect Competition

  •Large number of independent buyers and sellers, whose products are homogenous, identical, and nondifferentiated

  •Since all products are identical, consumers base their purchasing decisions solely on price and convenience

  •Firms have little control over the price of their products and must accept the prevailing market price
• Monopolistic Competition

  •There are many sellers or firms in the market but each produce a slightly differentiated product•These products are similar but not perfect substitutes, giving each firm some degree of market power
• Monopolistic Competition

  •There are many sellers or firms in the market but each produce a slightly differentiated product

  •These products are similar but not perfect substitutes, giving each firm some degree of market power
• Oligopoly

  •Market structure characterized by a small number of large firms dominating the industry

  •There are typically only a few major players, and their decisions significantly impact the market

  •The behavior of each firm is interdependent, meaning that the actions of one firm can have a substantial effect on the others
• Pure Monopoly

  •A single company is the sole producer and seller of a product with no close substitutes

  •Products are unique and cannot be easily substituted by other products, and has no close competition
• 1.) Access to Financing

  •It is difficult for Entrepreneurs to access credit and financial resources
• 2.) Investment and Interest Rate
• 3.) Challenges to Infrastructure

  •There are infrastructure deficiencies in the Philippines such as inadequate transportation system which affects logistics, production costs, and business operations.
• 4.) Climate Change and Environmental Stability

  There are times wherein the climate does not favor the businesses
• 5.) Global Economic Trend

  •Geopolitical events such as wars and international economic trends affects businesses in the Philippines
• 6.) Political Stability

  Local and international trust to the Philippine government is crucial for Filipino

  entrepreneurs