Answer to Question #217557 in Microeconomics for Felixco

Question

How does market conduct elements influence in market performance

Answer 1

The pattern of commercial behavior that enterprises follow in responding to the markets in which they sell or acquire is known as market conduct. Price determination behavior, product behavior, research and development, innovations, advertising, sales promotion policies, finance policy, and collusion are examples of commercial behaviors that result from the existing market system.

The types of pricing determination tactics, advertising, product and price displays, sales promotion strategies, and mode of payment/terms of sale are all determined by the market structure.

In brief, market conduct elements determines the pricing appraoch a business will follow. But the system is complex. For example, any company that sells a unique product has some monopoly power, regardless of its size. The degree of pricing discretion in a market is determined by the number of rivals and the expected pattern of interactions among them, rather than by absolute size.