Market structure (perfect competition, oligopoly)

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Market Structure:

When Amazon first started, the online retail market was relatively new and there were many small, independent competitors. This was close to a perfect competition market structure, characterized by many sellers offering similar products at competitive prices. However, as Amazon grew and became more dominant, the market structure changed to an oligopoly, where a small number of firms control a large share of the market.

Changes Since Formation:

Amazon has changed significantly since its formation. The company has expanded its product offerings, developed new services, and entered new markets. Some of the most notable changes include:

• Expanding Product Offerings: Amazon has expanded its product offerings beyond books to include a wide variety of products, including electronics, apparel, home goods, groceries, and more.
• Developing New Services: Amazon has developed new services, such as Amazon Prime, Amazon Web Services (AWS), and Kindle Direct Publishing.
• Entering New Markets: Amazon has entered new markets, such as cloud computing, digital media, and logistics.

Current Market Structure:

Amazon is now the world's largest online retailer and has a dominant position in the e-commerce market. The company faces competition from other large retailers, such as Walmart and Target, but it remains the leader in online sales.

Products and Services:

Amazon offers a wide variety of products and services, including:

• Retail Products: Amazon sells a wide variety of retail products, including electronics, apparel, home goods, groceries, and more.
• Digital Media: Amazon sells digital media, such as e-books, audiobooks, music, and movies.
• Cloud Computing: Amazon Web Services (AWS) is the world's leading cloud computing platform.
• Logistics: Amazon has its own logistics network, which it uses to fulfill orders and deliver products to customers.

Elasticity of Products:

The elasticity of Amazon's products varies depending on the specific product. However, in general, Amazon's products are considered to be relatively price elastic. This means that a change in the price of a product will lead to a larger change in the quantity of the product that is sold. For example, if Amazon lowers the price of a book, it will likely sell more books.

There are a few reasons why Amazon's products are considered to be price elastic. First, Amazon has a wide variety of products, so customers can easily find substitutes if the price of one product goes up. Second, Amazon is known for its low prices, so customers are price-sensitive. Finally, Amazon is a convenient place to shop, so customers are willing to search for the best prices.

Conclusion:

Amazon has come a long way since its humble beginnings as an online bookstore. The company has transformed the retail industry and is now a leader in e-commerce, cloud computing, and logistics. Amazon's success can be attributed to its focus on innovation, customer satisfaction, and low prices.

Sample Solution

Company: Amazon

Industry: Retail

Brief History:

Amazon was founded in 1994 by Jeff Bezos in his garage in Seattle, Washington. It initially started as an online bookstore but quickly expanded to offer a wide variety of products, including electronics, apparel, home goods, and more. Amazon has grown rapidly over the years and is now the world's largest online retailer.