Choose a well-known business that you have interacted with recently. It may be e


Choose a well-known business that you have interacted with recently. It may be easiest to choose a business with a physical location.
Write your answer according to the following three steps.
Start by listing the business you’ve chosen and brainstorming some explicit costs that would be associated with it. List as many costs as you can think of, and split them into fixed and variable costs, with a minimum of 3 fixed and 3 variable. If there are any that you are unsure about or think might be on the fence between fixed and variable, explain your rationale.
Next think about the market in which this business is operating. You might have to make a choice about the scope and nature of the market. [For example, if you choose an Indian restaurant, thinking about the market as restaurants in the Bay Area would be very different from the market for Indian food in Pleasant Hill.]
Once you have a sense of your market, briefly analyze our 4 key characteristics of market structures:
Number of sellers – How many competitors does this firm have?
Product differentiation – Are this firm’s products identical to that of its competitors, or differentiated? What is the degree of product differentiation in this industry, and in what ways do sellers differentiate their products? (For example, are we talking about different brands of gas, which are relatively similar, or types of cars, which are widely differentiated?)
Control over price – How does this firm’s prices compare with its competitors? Could this firm raise its prices and still sell its goods/services?
Barriers to entry – If you wanted to, how difficult would it be to enter this industry and start a competing business? Do any barriers to entry exist?
Based on your answers above, which of our 4 market structures do you believe best fits the industry in which this business is operating? Why? Was there anything that stood out to you or that you found difficult about this exercise?


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