Shoe market

The up merchandise for shoe industry refers to that division of the market that prefers to obtain expensive luxurious goods because they believe that they deserve case and experience goods. This market is characterised by the need to buy quality products, the consumers in this up market believe that the high equipment casualty of a stigmatize of shoe is a sign of quality and in that respectfore they willing buy expensive goods.The prices in this kind of market is not determined by the cost of production but by the theater producing the market, the prices argon high than in the other shoe market and therefore consumers spend more than on one pair of shoes and therefore the theatres in this market will gain more from the consumer surplus they tap.In this market there be a variety of brands and consumers can choose their required product, these shoes are also stylish product in that they are made for consumers who are high income earners and therefore a tighten in the in dustry will only need to market its brand and gain consumers attention.This is a competitive market because of the existence of 15 markets in the industry barely ony a few upstandings cede introduced branding and pricing strategy aimed at those high income earners and therefore competition is high in the shoe industry, there is however free entry and exit by crockeds into the industry.Monopolistic competitionIn a monopoly type of market there is only one firm in an industry and there exist barriers to entry and exit into the industry, the firm is also a price maker and not a price taker. In monopoly competition there exist several firms but the firms have little control over prices, there exist many firms in this type of market and each firm commands a small section of the market and therefore the prices are still determined not by demand and supply but by the firm.In the pathetic run in the Greson case the firm will make deviate profits but in the long run equilibrium this will not be possible as shown by the monopoly competition long run and short run equilibriumThe diagram below shows a monopoly competitive firm in the short runIn the short run the firm price is far beyond the medium cost and for this reason the firm makes abnormal profits.In the long run in a monopoly competition the equilibrium is as followsIn the long run the price is equal to the average cost and therefore the firm does not make any abnormal profits, however the assumption underlying this diagram is that the industry has no barriers to entry. comparable essay Homemade Shoe Polish From CharcoalReferencesPhilip Hardwick (2004) Introduction to Modern Economics, Pearson Publishers, youthful YorkStratton (1999) Economics A New Introduction, McGraw Hill Publishers, New York