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Environment of the Firm... Continued
On the other end of the equation are households who supply resources to the factor market and buy products from the goods market. The primary goal for consumers is to maximize their satisfaction called utility.
Therefore, a farm that desires to transform itself into a firm must, at the minimum, focus on customer satisfaction and profit making. To do so, the farmer must understand the market environment around them, especially the competition.
The Market Structure (30 minutes)
The competitive relationship among firms in the market place constitutes a market structure. The four main relationships include;
The key differentiating factors are the number and relative size of firms in the industry, the degree of product differentiation, the degree of interdependency or independence in decision making, and conditions for entry and exit. Let us investigate further.
