Assignment:
Market Structure
Some firms have a large share of the market while others are just starting. A firm can often create a brand name, which gives them market power. Market power is defined as the ability to raise prices without losing all demand. Since you are analyzing franchise firms, we can conclude that the brand name is somewhat established. Write a 3-4-page paper about the following issues:
1. What type of market do you think Hilton Hotels franchise operates (perfectly competitive, monopoly, monopolistically competitive, oligopoly)? What are the specific characteristics that make it this type of firm? Support your answers with economic thinking.
2. What type of competition does Hilton Hotels face? Who are some of the competitors? (Even if Hilton were a monopoly, think of some substitutes)
3. How do you think Hilton Hotels can increase in market power?