“Market Structures” Simulation

Market Structure Simulation -
Quasar Computers



Economic Strategy Team A
Chris Ford
Abdi Humphries
Karen Kennedy
Chris Shugart
Irene Vela
Facilitator: David Tucker
July 30, 2003

“Market Structures” Simulation

A) Over the course of a product life cycle, as the firm moves through the sequence of monopoly, oligopoly, monopolistic competition, and pure competition, the profit opportunities diminish. What strategies could the firm pursue to prolong its profitability?
The recommended strategies to prolong the profitability in each of the phases are as follows:
1. In the Monopoly phase the company must aggressively defend its patent and keep the market in a monopoly as long as possible since this is the phase in which it will see maximum profits. Offering great value to the consumer at this point builds a strong brand that will be hard to match by the entrance of the first level of competitors. Even if consumers are paying a little higher p...