Strategies in Monopolistic Competition

Question: Discuss about the Strategies in Monopolistic Competition. Answer: Introduction: Market structure in context to the economy means the nature of the business organizations or firms along with the degree of competition for purchase and sale of the products and services. Each of the firms or organizations belongs to some specific market structure that is determined by the nature or level of competition. The following assignment presents the discussion on several market structures that involves monopoly, duopoly, oligopoly and monopolistic competition in the education industry in Australia. Monopoly market structure refers to the market structure for a firm or organizational products or services for which the substitute is not available. Duopoly is a market structure which refers to the ownership by maximum two companies for the product market (Lehmann, Taylor and Hamm 2015). The market structure where the share of market for products and services is owned by small number of companies is called oligopoly. Besides, monopolistic competition is a market structure which specifies imperfect competition in which large number of firms deal in the products and services that are different with respect to the quality or presentation or brand (Brander and Spencer 2015). Accordingly, the study covers the determination of market structure related to education industry as per the Australian economy and nature of its market competition. Discussion The article on A review of literature on the vocational education and training market in Australia presents the issue and the ways of change in the market structure concerning the market principles. The article covers the funding issues, government policy issues and other regulatory issues that affected the market competition and growth for the vocational education for both the public and private service providers (Anderson 1996). Similarly, the article of the international education industry highlights the issues faced by the organizations providing higher education for the growth in Australia during the early years (Iannaccone 1991). Further, higher education markets and public policy article highlights the issue for reforming the market share for the organizations providing higher education in Australia in comparison with the education system and market of US (Dill 1997). Considering the market share for vocational education and training in Australia, it can be said that the growth rate of education market was low due to several policies and regulations. Such issues affected the new entry of service providers and proposed students for obtaining the education and training which eventually affected market share growth due to lack in demand and supply. Further, the macro policy issues with respect to the payment for training, training market share at the national level along with the local flexibility declined the market resulting in oligopoly market structure (Anderson 1996). Moreover, the market growth for international education in Australia during the year 1991-92 reflected only $1.2 billion value, though in recent years the market displayed enormous growth. However, during the earlier years the market of higher education industry affected due to macro and micro economic policy (Iannaccone 1991). Unlike recent years the key source of education market i.e. students from China were restricted and required to comply several regulations and policies. During the earlier years, the source of income also affected and as a result the market share remained limited to small number of service providers. Similarly, higher education market in Australia affected due to public policy and larger economic forces that changed the market share for government institutions as well as private institutions. Increase in the public policy regulations provided several barriers in acquiring international students, export of education and collection of payments for providing education (Dill 1997). Accordingly, the education industry could not achieve the perfect competition market until the recent years 2006 onwards that reflected significant growth in education market. The market oriented policies with respect to the new entrants of service providers resulted the lower market share and less competitive market. In view of the several issues on market of the education industry in Australia it can be analyzed that the educational institutions and service providers should consider the present education economy. The education market should be perfect competition market where the service providers are large in number for similar education services so that the Australian economy in education sector increases (Assenza et al. 2015). Accordingly the service provides are recommended to comply the legal requirements and government policies for export of education and acquiring international students. During the recent years, the current market structure shows that the value of higher education increased to $10 billion while most of the education market share occupied by the students of China. Moreover, the government and other concerned bodies relating to Australian education sector should simplify the policies and legal formalities, which is why the region experienced significant growth in recent years. Further, the benchmark of education should be as per the education system around the world incorporating the simple and qualitative education service for the students. Presently, the market structure of education industry is the monopolistic competition which constitutes imperfect competition as the service providers provide different types of education. Considering the vocational education and training market, the service providers need to improve the quality as per the international standard so that it can achieve perfect competition market (Berger, Cerqueiro and Penas 2015). According to the Australian economy, perfect competition market refers the market in which the service providers are large in number for identical service (Goschin et al. 2015). Since, market share for vocational education is lower in Australia, the institutions are required to focus on the quality so that they can acquire large number of students along with the introduction of new and improved means of vocational education system. Conclusion It can be concluded from the above discussion that the current market structure of Australian education industry is monopolistic competition market for private as well as public institutions. The market share for higher education have been increased at a higher growth rate reaching the value up to $10 billion while that of vocational education increased at a lower rate due to several policies of public and government. Hence, the institutions including government institutions and service providers are required to introduce improved education system to acquire more number of students. Such step would assist in achieving perfect competition market share by the education industry in Australia resulting in growth of economy. Reference List Anderson, D., 1996.Reading the Market. A Review of Literature on the Vocational Education and Training Market in Australia. Centre for the Economics of Education and Training, Faculty of Education, Monash University, Clayton, Australia 3168. Assenza, T., Grazzini, J., Hommes, C. and Massaro, D., 2015. PQ strategies in monopolistic competition: Some insights from the lab.Journal of Economic Dynamics and Control,50, pp.62-77. Berger, A.N., Cerqueiro, G. and Penas, M.F., 2015. Market size structure and small business lending: Are crisis times different from normal times?.Review of Finance,19(5), pp.1965-1995. Brander, J.A. and Spencer, B.J., 2015. Intra-industry trade with Bertrand and Cournot oligopoly: The role of endogenous horizontal product differentiation.Research in Economics,69(2), pp.157-165. Dill, D.D., 1997. Higher education markets and public policy.Higher education policy,10(3-1), pp.167-185. Goschin, Z., Constantin, D., Roman, M. and Ileanu, B., 2015. Regional specialization and geographic concentration of industries in Romania.South-Eastern Europe Journal of Economics,7(1). Iannaccone, L.R., 1991. The consequences of religious market structure Adam Smith and the economics of religion.Rationality and society,3(2), pp.156-177. Lehmann, W., Taylor, A. and Hamm, Z., 2015. Go west young man!Youth apprenticeship and opportunity structures in two Canadian provinces.Journal of Education and Work,28(1), pp.44-65. Nikaido, H., 2015.Monopolistic Competition and Effective Demand.(PSME-6). Princeton University Press.