Question

hi please help

Answer this prompt in 100-200 words: If you were starting a business, what market structure would you want to apply and why? In your comments, identify what you would sell, an existing company example, any barriers, anticipated competition and control over price.

Answer 1

My decision to start new business will depend on the level of competition, ease of entering the market and the power to influence prices. Since, I have limited capital, I would like to operate in a contestable market (Monopolistic Competition) because they involve lower startup costs and ease in entering and exiting the market. I would sell a gaming app "Boarder" that provides multi-game multi-player online platform for classic board games like monopoly, checkers, battleships, Yahtzee, etc. Boarder will provide players with an option to switch between different board games by installing a single app unlike Monopoly and UNO. The expected barriers to entry involve technology to support the games, server strength and necessary infrastructure to support the gaming structure. The anticipated competition will arise from the potential new entrants and the existing bigger companies like Supercell or Niantic might enter the market looking at the potential of the multi-game multi-player gaming app. However, the app might be unique, the pricing control is limited because the games are still available to the users individually and therefore, if I charge higher prices, they will prefer to keep 4-5 apps with zero or marginal prices rather than a high priced single app.