Managerial Economics

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ManaMODULE NAME:MANAGERIAL ECONOMICS

PROGRAMME:MASTER OF BUSINESS ADMINISTRATION

SURNAME:LUKHELE
FIRST NAMES:JOSEPH BHEKI

STUDENT NUMBER:MBA 111553F
E-MAIL ADDRESS:lukheleb@moseskotane.com
ALTERNATIVE E-MAIL:lukheleb@moseskotane.com
POSTAL ADDRESS:C/O MOSES KOTANE INSTITUTE
14 LAKESIDE
DERBY DOWNS OFFICE PARK
1 UNIVERSITY ROAD
WESTVILLECODE: 3630
CONTACTS:
(Home):083 330 4440
(Work):031 266 1777
(Mobile):083 330 4440
I hereby confirm that the assignment submitted herein is my own original work. -------------------------------------------------
Signature of Student……………………………………Date:……………………………… For office use only:
Date scanned and returned to student…………………………………………………….

TABLE OF CONTENTS
Page
1.Question 1Overview of perfect and imperfect market structures2 1.1.1Nature of the markets2
1.1.2Perfect competition4
1.1.3Monopoly9
1.1.4Imperfect competition13
1.1.4.1Monopolistic competition13
1.1.4.2Oligopoly14
1.2Price fixing, collusions and cartel behaviour patterns17 1.3Oligopolistic industry and price formation18
2.Question 2The Global Economic Crisis22
2.1Introduction22
2.2“When America sneezes, the rest of the world catches cold”26 2.3 Global Economic Crisis28
2.3.1“The Great Depression”28
2.3.2Causes of “The Great Depression”29
2.3.3End of “The Great Depression”31
2.3.4Historical Importance of “The Great Depression”31 2.4Factors that led to the “Global Economic Crisis”32 2.5Indicators and/or consequences of the economic crisis35 2.6Economic lessons that have to be learnt36

List of References39

Question 1.1 Overview of perfect and imperfect market structures 1.1.1 Nature of the Markets
Market may be defined as the organized exchange of commodities (goods, services, or resources) between buyers and sellers within a specific geographic area and during a given period of time. In essence, a buyer gives up money and gets a good, while a seller gives up a good and gets money. From a marketing context, in order to be a market the following conditions must exist: * The target consumers must have the ability to purchase the goods or services. * They must have a need or desire to purchase.

* The target group must be willing to exchange something of value for the product. * Finally, they must have the authority to make the purchase. If all these variables are present, a market exits.

Market structures
A market structure may be defined as the manner in which markets or industries are organized, based largely on the number of participants (buyers and sellers) in the market or industry and the extent of market control of each participant. The structure of a market primarily depends on the number of firms operating in the market. Standard market structures

Economics identifies the following standard market structures based on their nature: * Perfect competition
* Monopoly
* Imperfect competition, which is further divided mainly into: * Monopolistic competition
* Oligopoly

Question 1.1 Overview of perfect and imperfect market structures

Market Structure Continuum|
|
The exhibit to the right illustrates how these four market structures form a continuum based on the relative degree of market control and the number of competitors in the market.

Question 1.1 Overview of perfect and imperfect market structures 1.1.2 Perfect competition
Perfect competition occurs when none of the individual market participants can influence the price of the product. (They are price takers). The price is determined by the interaction of demand and supply and all the participants have to accept that price.

The demand curve for the product in the market

Perfect competition is an ideal market structure characterized by:

* A large number...
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