Differentiating Between Market Structures

Differentiating Between Market Structures

In economics there our different market structures. And depending on which type of company we are examining, the company is sorted into one of these structures. For the purpose of this paper, the cellular company named “Sprint” will be the company that will be focus on. This paper will explain which market structure Sprint belongs to and how the market structure of Sprint differentiates from the other alternatives. Then the paper will identify three strategies that sprint may be able to use in order to maximize its profits over the long run and also evaluate the efficacy of the strategies in the market. Finally the paper will make recommendations related to the strategies. Sprint may then conceder to accept these recommendations in order to maximize its profits.

The market structure that Sprint belongs to would be in an Oligopoly structure. In this market, the numbers of sellers are few. And in other market structures the amount of competitor are different. In a monopoly there is no competition, in Monopolistic competition there are few too many competitors, and finally in perfect competition there are a high number of competitors. In an oligopoly market structure the seller is usually big enough to make an impact on the market and should respond to any choices that its rival would do, but on the other hand its rivals also have to respond to its choices as well if they want to compete.

The first strategy that Sprint could use would be to increase its output of cell phones that it offers/sells. By doing this they would be able to increase the amount of customers it has. This would lower the prices that the customer pays for each cell phone, but since they would gain more customers, this would increase the amount of profits that it produces. The second strategy Sprint could use would be to lower the prices of its phones and plans. By lowering both items, it would entice customers to change from their current providers and go with sprint. This would lower what each customer’s pays. But since Sprint would gain more customers, the profits would rise because of a larger client base. And the third strategy would be for Sprint to increase its customer support. By help customer out and being more accessible to its clients, this would inspire new customers to join Sprint and current customers would be recommending the services to friends and family. As the customer