Market Structure

Differentiating Between Market Structures

Stephanie Myers

ECO/365

July 7, 2014

Eugene Gotwalt

Differentiating Between Market Structures

Barnes and Noble Market Structure

Barnes and Noble is the ultimate destination for consumers to expand their knowledge or

enjoy a quiet getaway with their favorite author or connect with a new author. Leonard Riggio,

the company's chairman, began his bookselling career while attending New York University in

the early 1960s, and specializes in books, magazines, video, DVD, and music. As a publically

traded company with almost 700 bookstores in the 50 United States. Barnes is the largest retail

bookstore in shopping malls, colleges and universities, and major strip centers plus being on the

web provides a strong market structure for them. In economic theory there are four different

markets; perfect competition, monopoly, monopolistic competition, and oligopoly (Colander,

2010). Without different markets there would not be any structure. Therefore, it is important to

understand and determine the different market structure, the effect of externalities on market

outcomes, the barriers new firms have when entering the market, the effect of government

interventions, taxation, and regulation on economic behavior. Also this paper will identify three

competitive strategies to maximize profits in the long run, the efficacy of strategies on the

organization of Barnes and Noble, and the three types of merger; horizontal, vertical, and

conglomerate.

Barnes and Noble made a vertical merger when they became part of the Waldenbooks

stores, but a conglomerate merger transpired when Waldenbooks store sold to K-Mart in the

earlier 1990 as their product consist of books, maps, CDs, DVD, board games, and gift packs

(Wikipedia). In 2010 Barnes and Noble’s biggest competitors Borders, made the bid to engage in

a horizontal merger, and Borders purchased them for $960 Million. According to Friedman, “the...