Filed under: Uncategorized | Tags: competitive market, economy, goods, market, variety
Before this moment variety was widely considered to be a property of highly competitive market, while, on the contrary, similarity of goods was a property of monopolistic market. This is very logical assumption which can be explained clearly!
Highly competitive market has many players, who try to distinguish themselves selling product/service which is different from others. Moreover, every player sells many products/services targeted at the different customer groups. Thus market becomes saturated with the various offers from the numerous vendors. It is classical state for the highly competitive market.
Though the desribed state is unstable. To see it let’s take the position of the single customer. Every moment rational customer decides which product/service to buy. To accomplish it customer should compare available goods which please him/her… unless the process of choosing right item takes up all the spare time. To solve the problem of the right choice companies go for easing customer’s life even if the product/service may have limited capabilities after. Producers/Providers shrink the number of products/services and expand the number of features every item can have!
Here new state of market appears: sameness of goods in highly competitive market.
But this state is also unstable. Again, after some time past, customer wants more variety… and pendulum walks back
