clothes as my product of choice
A market is a place where sellers and buyers meet to exchange products for money. The prices charged in every market highly determines the amounts of sales that can be met by the sellers. There are markets, which charge similar prices for same commodities while others charge different prices for the similar commodities (Horstmann, Ignatius and James, 112). Barriers to entry exist into a given market can be used to determine the kind of market structure that exist in a given region in addition to the number of buyers and sellers in the same market. This discussion analyses clothes as my product of choice.
Clothes are mainly differentiated based on quality and prices. Clothes is a type of product that attracts almost everybody. Many people are always interested in selling and buying of clothes. Most markets for this product are usually characterized by many sellers and buyers. Therefore, consumers are the main buyers for clothes while traders are sellers for this kind of product. There are no barriers to entry and exit from this kind of markets (Horstmann, Ignatius and James, 113). Thus, anybody is allowed to trade in this kind of market. In most markets, the prices charged on the same quality of clothes are usually similar. These prices are usually differentiated through advertising in order to attract most customers. In most cases when a seller in this market tries to set a price, which is higher than that of his/her competitors, he/she is likely to lose customers to his competitors. Therefore, consumers are very sensitive to prices in this kind of market.
The kind of market that comes very close to this product is the perfectly competitive market. There are many buyers and sellers in this market just as outlined above. There are also no barriers to entry and exist in this market. Prices in these markets are only are arrived at through the forces of demand and supply thus sellers have no control over them. There are also many buyers and sellers in this kind of markets. Thus, this is the closest market for clothes.