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Market structure

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  • Could you help me to compute this one?Pretty please...I really have no idea about this:

    Initially you will have a total of 9 emlpoyees. Except for one office manager who will be paid P15,000/month, the rest will be paid the minimum wage.

    1.Determine the employee & the employer share for SSS, Philhealth and Pag-ibig fund.

    2.Determine the withholding taxes for the employees.



    I will greatly appreciate if you explain it for me so I can fully understand how it come up.(From a student who really wants to learn abot Taxation)
       Reply 
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  • 1. MARKET STRUCTURE
  • 2. TYPES OF MARKET STRUCTURE Perfect Competition Monopoly Monopolistic Competition Oligopoly
  • 3. Perfectly Competitive Market • Less market power • Price takers • Goods are homogenous • Free entry and exit • Perfect Information Monopolistic Competition • Many firms • Free entry and exit • Differentiated but highly substitutable product Oligopoly • Small number of firms • Product differentiation may or may not exist • Barriers to entry Monopoly • There is market power • Single seller • One product (limited or no good substitutes) • Barriers to entry TYPES OF MARKET STRUCTURE
  • 4. Perfectly Competitive Markets Price Taking 1. The individual firms sells a very small share of the total market output and, therefore, cannot influence market price. 2. The individual consumer buys too small a share of industry output to have any impact on market price.
  • 5. Perfectly Competitive Markets • Product Homogeneity 1. The products of all firms are perfect substitutes 2. Example – Agricultural products
  • 6. Perfect Information 1. Buyers and sellers have all the pertinent information necessary for them to make decisions on buying or selling goods and services. Perfectly Competitive Markets
  • 7. Monopolistic Competition • Imperfect or Monopolistic Competition –Many buyers and sellers –Products differentiated –Relatively free entry and exit –Each firm may have a tiny ‘monopoly’ because of the differentiation of their product –Firm has some control over price –Examples – restaurants, professions – solicitors, etc., building firms – plasterers, plumbers, etc.
  • 8. Water Refilling Station • The 1980s saw proliferation of gadgets and equipment to purify water. • The purification was done mostly at home. • Only simple process of passing tap water through a filter. Monopolistic Competition
  • 9. • The 1990s added the sophistication of water purification technology with the entrance of bottled water. Raw water passed through 6-8 processes of treatment. • The sophistication, along with packaging, branding, manufacturing costs, led to drinking water being expensive. Monopolistic Competition
  • 10. • Water refilling stations provided a cheaper alternative. More than 3,000 stations are estimated to have been put up in the country presently. • Initially, customers came to stations with their own containers. Monopolistic Competition
  • 11. Water Refilling Station • Eventually, services extended free delivery of 5-gallon containers with free use of a hot and cold dispenser provided a minimum weekly consumption is met. • Some stations also sold different types of dispensers and smaller sizes of bottled water.
  • 12. Monopolistic competition • There are no barriers to entry. In other words, there is free entry and exit. • There is product differentiation. The station claims to offer water treatment different from other stations through different technology. Thus, their treated water supposedly are slightly different from their competitors. • Products are substitutable with one another.
  • 13. The barriers to entry are: 1. Natural – Scale economies – Patents – Technology – Name Recognition 2. Strategic Action – Flooding the market – Controlling an essential input oligopoly
  • 14. Examples of oligopolistic structures: • Supermarkets • Banking industry • Chemicals • Oil • Medicinal drugs • Broadcasting oligopoly
  • 15. MobileCellularPhoneIndustry Prior to 1995, landline telephone dominated the telecommunication sector. PLDT was considered a monopoly back then. In 1995, the Telecommunication Act of the Philippines (RA 7925) was enacted, setting the policy for competition and liberalization of the telecommunication sector. It opened up the paging and the mobile telephone business.
  • 16. Strategic Actions • Before SUNCELL entered the market, instead of price being lowered, strategic actions were being exhibited to gain bigger shares of the market
  • 17. • The Telecommunication industry (landline) started out as a monopoly. • As a whole, the mobile cellular phone market is a Oligopolistic market. –Three Major Players –Services are slightly differentiated –There are barriers to entry oligopoly
  • 18. • Barriers to entry 1. Control of Inputs – firm may own the total supply of a raw material that is essential in the production of some product. – DE BEERS / MERALCO 2. Economies of scale – One supplier can produce at a lower per-unit cost than several smaller firms. monopoly
  • 19. 3. Patents – Exclusive rights given to inventors for a limited period of time. – AT&T / BELL COMPANY 4. Licenses/Franchises – Granted by the government as a condition for operating in the market. Monopoly
  • 20. • The monopolist is the supply-side of the market and has complete control over the amount offered for sale. • Limited by Demand Monopoly
  • 21. Philippine Electric Power Industry

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